Last checked at 
(Adds more detail)
By Huw Jones
LONDON, March 9 (Reuters) - A transatlantic battle between
stock exchanges and top customers heated up on Monday when
Britain's Financial Conduct Authority began reviewing if market
data was being sold at fair prices.
Asset managers and banks in the United States and Europe
have long called on regulators to force exchanges to cut the
price of data. Bourses say they are not gouging customers.
The FCA said feedback from market participants suggested
that some trading venues and benchmark administrators may not
face sufficient competitive pressure, allowing them to charge
high prices to customers and competitors.
It said it was using a "call for input" to better understand
how data and advanced analytics are being accessed and used, the
value offered to participants in wholesale markets, and whether
they are competitively sold and priced.
"The FCA wants to know whether users have concerns with the
way trading data, benchmarks and vendor services are priced and
sold," the watchdog said in a statement.
Data includes prices, bid/ask quotes and volumes of all
financial instruments like stocks and bonds.
The Federation of European Securities Exchanges, an industry
body, said last year that market data costs have remained stable
in recent years, and the real issue was the often low quality of
data from off-exchange or "dark" trading platforms.
The FCA said its review would determine if it needed to act,
such as by improving competition between data vendors, or making
it easier to switch between benchmark providers.
Data has become a revenue driver for exchanges as tougher
competition in trading erodes margins.
The London Stock Exchange is buying data and analytics
vendor Refinitiv for $27 billion. Refinitiv is 45%-owned by
Thomson Reuters, which owns Reuters News.
Under European Union "MiFID II" securities laws, asset
managers and banks must show clients they have "executed" share
trades at the best prices and need data from exchanges for this.
EU markets watchdog ESMA said in December that MiFID II had
failed to cut the cost of stock market data, effectively making
it uneconomic to build a pan-European feed for investors to
compare share prices on different platforms and compete better
with U.S. markets.
The EU's executive European Commission has responded by
consulting on possible changes to MiFID II.
Britain's departure from the European Union in January means
that the FCA will have no say in how the bloc intervenes in
market data pricing.
Britain cut and pasted MiFID II into UK law ahead of Brexit
and would therefore have to make any changes itself.
The FCA noted interventions in the United States, where the
United States, the Securities and Exchange Commission (SEC)
proposed rules in January to govern data feeds after pressure
from banks and asset managers.
The review, which closes in May, will look at firms that the
FCA regulates and "connected, non-regulated activities and
firms" and the FCA will set out its next steps in the autumn.
(Reporting by Huw Jones; Editing by Rachel Armstrong, Alex
Richardson and Alexander Smith)
