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Little Britain and the MiFID Big Picture

I was chairing a conference panel session recently.  One of the panellists represented one of the UK stock exchanges (you mean that there’s more than one?  Whatever happened to the idea that exchanges are consolidating?  Isn’t it just the Germans that still have more than one stock exchange?).  Another was from a major global (but not British) investment bank that is a co-owner of BOAT.

The UK exchange representative was taking a bit of poke at BOAT – in his view, it seemed that BOAT intended to charge an incredibly exorbitant sum for a tiny dribble of market data, as compared to the absolute deluge of market data that the generous exchange made available to the free world for the tiniest of considerations.

Chris Skinner’s blog today on the topic of BOAT and data pricing reminded me of this enjoyable panel session.  If an alien from another planet had walked into the conference room at that point, it would probably have been justified in thinking that this was a debating society meeting, with a representative of the paupers and homeless of London fighting its ground against the Evil Capitalist Empire.  However, as the representative of the global investment bank did try to point out, there are certain synergies between the investment banks and the exchanges.  In Britain, we are all so polite!

BOAT will not just deliver data about British equities, but about European equities, as Chris says, so the fees that it charges for its data cannot fairly be compared to how much just one UK stock exchange charges for its data.  Say that there are 20+ stock exchanges in Europe, all charging for their data: multiply one exchange’s data fees by 20, and then see whether BOAT’s pan-European data looks expensive.  Then add on the fees that each exchange says you have to pay for using the exchange’s own private network to receive that datafeed, and BOAT could look cheap.

MiFID isn’t just about Little Britain, after all!

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