Starting January 3, IEX Exchange will charge for market data.

I know reading this sentence might make you want to show up at my house with a pitchfork, but before you do, I’m hoping you’ll at least read the rest of this blog.

In any industry, going from “free” to “charging” is contentious. But in market data? Coming through unscathed is like making it through all 6 games in Squid Games (I’m told this is a timely and topical reference). My commitment now and going forward is that prices will be reasonable and grounded in the costs we incur to provide the data. Let’s look at the facts:

• IEX has never charged for market data, either as an ATS or as an exchange.
• IEX has been very vocal about the way that other exchanges charge for market data is unfair, exorbitant, and should be more strongly regulated because exchanges have a natural monopoly over their own market data.
• IEX even went as far as to publish a whitepaper citing our own costs and the fees we pay to other exchanges for market data.

We have always said that it should be priced fairly and transparently given its critical role to all market participants.

We believe our new, transparent model for market data pricing does just that.

A Better Way to Charge

In 2021, IEX Exchange expects to incur about $2.5 million in costs related to market data. It’s a substantial increase from the $1.8 million in annual costs that we cited in our 2019 whitepaper and includes technology costs like network infrastructure and data center space, as well as increases in personnel costs and enhancements like our DEEP and TOPS Snapshot functionality to meet the demands of our Members. Highly-performant systems like market data need to be constantly improved (even if you aren’t competing to be the fastest around!).

Ultimately, we want to recoup our costs plus a reasonable 25% markup, which would bring us to $3.1 million per year. To get there, we set prices for our market data products:

• Real-Time TOPS (top-of-book quotes and trades): $500/month
• Real-Time DEEP (depth-of-book quotes and trades): $2500/month
• Redistribution (flat add-on for vendors that pass on real-time market data to their customers): $500/month

It’s that simple. Where other exchanges have complicated market data fees with 60+ different product codes per exchange, we have endeavored to keep it almost obnoxiously straightforward. I encourage you to go read our fee filing and attempt to compare our market data fees to those of other exchanges: you will observe an immediate difference.

These prices represent a significant discount from the prices set by other exchanges for comparable products. But it’s not just that.

Flat and All-Inclusive Fees

No separate fees for display/non-display usage, professional/non-professional usage, or controlled/uncontrolled products.

Redefining “Real-Time”

Industry standard for “delayed data” is any distribution at or after 15 minutes. Yep, that means that data that is 14 minutes and 59 seconds behind can be charged at “real-time” prices. That didn’t make sense to us. So here at IEX Exchange we decided that data is considered “delayed” after 15 milliseconds. IEX Exchange will not charge fees to anyone who only receives delayed data (available via third-party providers such as IEX Cloud, which is separate from IEX Exchange).

Time to Plan

Exchange fees are “effective on filing” with the SEC, meaning that historically, exchanges have been able to change fees with virtually no notice. Our new fees are not effective until January 3, the first trading day of 2022 to allow data subscribers time to plan.

While market participants are probably not thrilled by the prospect of a new line item in their expenses, we are committed to leading by example in charging a reasonable amount for market data that is priced and justified responsibly.

Please reach out to me or your IEX contact with any questions, or I guess even complaints.