Thursday, March 1, 2018

UTP Vendor Alert #2018 - 3
Current and Historical Market Data Revenue Information Now Available from the Securities Information Processors (SIPs)

The data show that over the last decade, SIP revenues have decreased despite an enormous increase in message volumes. During that time the SIPs made significant technology improvements to handle these new processing demands, to reduce latency and increase uptime to unprecedented levels.

Historical data is available now and moving forward this quarterly information will be published, with a 60-day lag, on the respective Plan websites: Consolidated Tape Association (“CTA”) data can be found here and Unlisted Trading Privileges (“UTP”) data can be found here.

Tape C Trade & Quote Revenue Distributed to Participants

"Today’s announcement furthers the SIPs' commitment to transparency, which is undoubtedly a positive development for investors and market participants across the industry,” said Emily Kasparov, Chair of the SIP Operating Committees.

“Over the past several years, median latency has been reduced to under 20 microseconds for the UTP SIP and is expected to be below 50 microseconds for the CTA SIP following its technology upgrade later this year. All this occurred while message volumes since 2008 nearly doubled and overall revenues declined.”

Kasparov added, “The SIP Advisory Committees have primarily asked for two things: improved performance and increased transparency. We have made great strides on both fronts and look forward to continuing to work with the industry to ensure that our markets remain the strongest capital markets in the world.”

Publication of revenue data is the latest example of the SIP Operating Committees’ commitment to increasing transparency by providing detailed information into the respective operations of the CTA and UTP. Last November, the Committees released detailed summaries of the Market Data Revenue Allocation Formulas for both Plans, which can be found here and here . In addition, the CTA and UTP websites include summaries of the General Sessions from the Operating Committees’ quarterly meetings, plan policies, quarterly and monthly performance metrics, pricing schedules, technical specifications, and more.

ABOUT THE SIPs

The “SIPs” (Securities Information Processors) link the U.S. markets by processing and consolidating all protected equities bid/ask quotes and trades from every registered exchange and FINRA’s Alternative Display Facility (ADF) into a single, easily consumable data feed. The SIPs are an asset unique to U.S. market structure and play a critical role in making the U.S. equities markets transparent and accessible to investors worldwide.

Although often referred to in the singular, there are actually two SIPs: the combined CTA (Consolidated Tape Association) and CQ (Consolidated Quotation System) SIP, and the UTP (Unlisted Trading Privileges) SIP. The CTA/CQ SIP is responsible for the dissemination of real-time quote and trade information in New York Stock Exchange listed securities (sometimes called “Network A” or “Tape A” securities) and Cboe, NYSE Arca, NYSE American and other regional exchange listed securities (sometimes called “Network B” or “Tape B” securities). The UTP SIP handles Nasdaq listed securities (sometimes called “Network C” or “Tape C” securities). This structure has been in place since the late 1970s, when the Securities and Exchange Commission (“SEC”) mandated that all registered exchanges that trade Network A, B, or C securities send their trades and quotes to the SIPs for consolidated worldwide distribution.

Per the SEC, each SIP is governed by a Plan and run by an Operating Committee (“OC”) comprised of its Plan Participants. The OCs are counseled by an Advisory Committee made up of individuals representing firms from across the industry and representing the diverse viewpoints of the market. Among other duties, the OCs set their individual Plan policies, select a Processor that is responsible for providing the technology to power it, and review the performance of both the Processor and the network administrators, which are responsible for the administrative functions for each SIP, such as contracting, billing, auditing, policy development and vendor relations. New York Stock Exchange serves as the Administrator for the CTA/CQ SIP Plans and the Securities Industry Automation Corporation is the Processor. Nasdaq business units serve as the Administrator and Processor for the UTP SIP.

One of the primary objectives of both SIPs is transparency. Both the CTA/CQ Operating Committee and UTP Operating Committee meet quarterly, and the summary of the General Sessions of those meetings are posted to their respective websites:www.ctaplan.com and www.utpplan.com. Also provided on those websites are their Plans’ announcements, policies, quarterly and monthly performance metrics, the pricing schedules, technical specifications, and more.

MEDIA CONTACT

Rafi Reguer
Forefront Communications for the SIP Operating Committees
+1 318.734.8377
rafi@forefrontcomms.com