Last week the SEC made the biggest updates to its market data policies since the 1970s. Below I'll do my best to summarize the major changes & impacts of "NMS 2.0" on investors. A thread:
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The 2nd big change with NMS 2.0 is the introduction of "competing consolidators". With NMS 1.0, exchanges were required to send basic data through a lower cost public feed. The premium data could still be sold through proprietary feeds at high cost.pic.twitter.com/SBJit62JRq
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With NMS 2.0, exchanges will now be forced to send data to a middle man - the competing consolidator - at a price the SEC sets. The introduction of competition should *in theory* lower costs and improve quality of public data.pic.twitter.com/m2haF6hS8D
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We're already seeing competing consolidators pop up to prepare to challenge the legacy exchanges. Below announcement from MIAX in November 2020: https://www.prnewswire.com/ae/news-releases/miami-international-holdings-announces-that-it-is-evaluating-registration-as-a-competing-consolidator-830208417.html …pic.twitter.com/JOUnPXoiVk
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While I believe we're moving in the right direction, the system is still EXTREMELY complex and vulnerable to loopholes. The original SEC proposal is a whopping 898 pages: https://www.sec.gov/rules/final/2020/34-90610.pdf …
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I acknowledge I'm still working to fully understand the changes, but the above is my impression so far. What's missing? What else changed that's important/impactful? More sources: https://www.wsj.com/articles/sec-approves-plan-to-bring-more-detailed-stock-market-data-to-public-11607532641 …https://www.findknowdo.com/news/12/10/2020/sec-introduces-competition-nms-data-collection-consolidation-and-delivery?utm_source=Newsletter&utm_medium=Email&utm_campaign=Cabinet+Newsletter …
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