Littlefinger and Ned Stark game of thrones season one

The battle between the New York Stock Exchange and its critics just hit a new low: The participants in the war of words are now arguing over Game of Thrones references.

No, I’m not joking.

This is the latest installment in a long-running battle over the cost of data, connectivity and colocation, and was triggered by the Big Board’s request to change the fees it charges for certain connectivity services.

In a letter to the Securities and Exchange Commission dated January 17, NYSE took aim at some of its biggest customers, and argued that the connectivity fee, which covers the costs of connecting to the NYSE data center, would not be a market data fee.

To make the point, NYSE likened the situation to having to buy a TV to watch “Game of Thrones,” saying that the cost of the TV and the cost for HBO content are separate. 

“The mere fact that a User needs to have equipment and connections in place in order to be able to receive a market data feed within co-location does not convert the costs of such equipment and connections into market data fees, or convert the Previous and Current Proposals into market data filings. By way of analogy, to view ‘Game of Thrones’ one must buy a television and pay for a subscription to HBO, but that does not convert the cost of the television, or of any other necessary equipment or connection, into a fee for the HBO content.”

Now, SIFMA, a trade body, has responded with its own “Game of Thrones” reference. In a letter to the SEC dated February 6, it said: 

“Lord Petyr ‘Littlefinger’ Baelish would blush at the deception this analogy presents. Unlike HBO, NYSE controls the cost and terms of use for not only the market data, but also the connectivity fees, port fees, cross connect fees, and cage fees. The HBO content analogy would be akin to NYSE’s market data fees if HBO were also in a position to require the viewer to purchase from HBO the cable connection, the television, the television stand, the power cord, and the electricity, all in addition to the HBO subscription itself, and on the terms set solely by HBO.

“Further, and unlike subscribing to a television program, brokers are legally obligated to seek best execution for their customers. They are required to consider the likelihood that a trade will be executed and whether there is an opportunity to obtain a price better than what is currently quoted. There is no analogous legal requirement that television viewers subscribe to Game of Thrones.”

These are technical points, but they get at the heart of the issue around market data, which we’ve written about a lot. The debate centers on whether these services are essential — some customers and rivals say they are, the exchanges say otherwise — and whether there is any competition in the market for that data.

Business Insider recently sat down with Tom Farley, president of the New York Stock Exchange, and asked him about this issue. Here’s what he said: 

“The provision of proprietary market data is competitive. I’ll give you one example. I won’t give you the particular name, but I’m sure with your reporting you can figure it out. There is a customer that was a customer of Nasdaq; they then became our customer, because we competed on price and product, and we innovated and won that. They then left us and became BATS’ customer, because they innovated on price and product. And last I heard, Nasdaq and BATS are doing a bake-off to see who gets their business next.

“Proprietary data is competitive. The cost of proprietary data has risen commensurate with the fragmentation in the marketplace. We have four platforms. Nasdaq has six platforms. If you only have one platform, your market data is going to cost something. When you have six, it is going to cost a good deal more.

“With respect to colocation fees, if we walked down to the floor, you’ll still see some big folks down there, and that’s because there was this Darwinian process for centuries where there was literally elbowing and shoving to get to as close of the center of the exchange as possible. That’s how floors work. Some people got closer than others, so on and so forth.

“The logical evolution of that, colocation, puts everyone who so chooses in our data center at precisely an equal distance from everyone else, and 95% of the volume that we’re getting is coming through people who are co-located in our data center. Where we are today, with the equal access, is better than at any point in history.”

Check out the full interview with Farley here.

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