Exchange data fees

Summary: There is a very costly and largely hidden component in trading stocks and it affects investors of almost any size. And that is the data fees charged by stock exchanges.

MMI position: Data fees charged by stock exchanges have risen dramatically in recent years – by some estimates as much as from 250% to 700% over the past five years. Exchanges use two data feeds for their pricing information – one public and one private. The private feeds are faster and cost more money for brokers. Those costs can be passed on to smaller investors – which in effect can be a retirement tax for those saving for their golden years. MMI supports leveling the playing field and having “one data feed at one speed.”

Regulatory fee modernization

Summary: Wall Street’s regulators aren’t being provided the resources they need to be the most effective cops on the beat and root out bad behavior.

MMI position: It’s vital to our nation’s markets that they are well-regulated and that the government’s regulators have the tools they need to effectively do their job. Wall Street firms are investing billions of dollars in technology and public sector regulators have only a small fraction of that to spend. While the SEC collects fees to self-fund its work, any surplus – some years at least a half-billion dollars – goes not to regulatory enforcement but instead to the general U.S. Treasury. Congress needs to modernize SEC funding to ensure the public is protected.

IP Protection

Summary:  There has been a move afoot in recent years to allow the CFTC to require that trading firms submit their intellectual property (mostly algorithms) to the Commission. Traders use computer algorithms to help execute trades but their proprietary source codes are being threatened.

MMI position:  MMI supports safeguarding intellectual property rights in source code by requiring a subpoena, and other safeguards be taken, before IP source code is compelled to be furnished by the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC).

Speaking on the House floor during debate on his amendment, Congressman Sean Duffy said, “Protecting intellectual property is a cornerstone of our free enterprise system… This is highly-sensitive source code. This is intellectual property that helped the functionality of our marketplace. And to think that this kind of sensitive data can be taken by the federal government without a subpoena should shock our conscience.”

Financial Transaction Tax

Summary:  A very small government tax has been proposed on every share of stock traded in the U.S. That could add up to very large costs for public pension funds across the country.

MMI position:  Senator Bernie Sanders has proposed what’s called a Financial Transaction Tax (FTT) on very share of stock traded.  That would result in a massive new fee for pension funds – billions of dollars each year in extra cost.  While the Senator’s aims for using this money may be admirable, we can’t put savings and retirement at risk.  The FTT would undermine the retirement security of the very base the senator seeks to help.