In a joint letter to the US markets watchdog, the Bond Dealers of America, the Investment Adviser Association and the Government Finance Officers Association, argue that the licensing fees charged for Cusip reference data by S&P are "unreasonable and unwarranted".

They claim that charges ranging from $10,000 to hundreds of thousands dollars per year are passed on by the Cusip Service Bureau (CSB) without "any transparency, accountability or oversight".

"Cusip identifiers, once an industry utility, are a critically important means of identifying individual securities," says Mike Nicholas, chief executive officer of the BDA. "However, the CSB's insistence on charging rapidly increasing and non-transparent fees is having a chilling effect on market transparency and the free flow of information for investing, trading, accounting risk management and regulatory reporting."

The European Commission has already opened a probe into the pricing structures applied for proprietary entity codes by S&P and Thomson Reuters. The EC's objections followed a decision by Bloomberg in November last year to make its own proprietary symbology available for free to developers and market practitioners.

In the US, trade bodies contend that S&P has been ratcheting up fee structures for Cusip data, which is often mandated by the SEC for use in regulatory reporting.

"Where the use of a Cusip identifier is mandated by the SEC or a self regulatory organisation, it is inappropriate for S&P or the CSB to require payments," notes Nicholas. "A securities identifier is a fundamental part of the transaction side of the business. This steadily increasing fee ultimately increases the costs for individual investors."

In conclusion, the BDA, the IAA and the GFOA "strongly recommend the SEC follow the EC's example and investigate S&P's practices in the US".