European stock exchanges and the rise in market data costs

Key Takeaways

• A new report by Market Structure Partners finds Europe’s largest exchanges are raising market data costs to offset declining trading revenues.
• The exchanges refute these findings and argue that the market data hikes have been minimal.
• While there are calls for regulators to step in, it is hoped that the impending consolidated tape will address these issues.

European stock exchanges have raised market data prices significantly to offset declining trading volumes and shrinking customer bases. This has stifled innovation and prompted calls for policymakers to ensure fair pricing and capital markets growth.

These are the findings of advisory firm Market Structure Partners’ (MSP) new report, entitled There is no market in market data. Commissioned by the European Fund and Asset Management Association (EFAMA), the study examined the practices of Europe’s largest bourses – Deutsche Börse, Euronext, London Stock Exchange Group (LSEG), Nasdaq Nordics, and SIX Swiss Exchange.

Reliance on market data revenues

The report revealed that the bourses’ reliance on market data revenues dramatically augmented the cost of essential market information for issuers, investors, and intermediaries. This was despite there not being any specific costs tied to producing market data or operating trading platforms. In fact, software, hardware, data center costs, cyber security measures, and power were declining, or only rising in line with inflation.

Moreover, exchanges in the UK and Europe have run the same trading technology for more than a decade with no evidence of any significant expenditure in their accounts. As the report puts it, there were no “rational reasons” for their actions.

Equally significant, the report found that a premium was applied for the use of non-display data even though both the machine and the physical users consumed the same data feed. This was seen as a way to offset potential revenue decline when customers moved to automate jobs.

It noted that non-display data users are tiered according to the business activities such as those that operate a competing trading venue, employ data to create their own index, or acting as pure brokers. By contrast, display fees were divided into the professional or non-professional categories.

The report showed that stock exchange rivals most notably trading venues or index providers were among those experiencing the most dramatic price increases for non-display data. The former saw these costs surge by up to 481 percent between 2017 and 2024, while the range for the latter was between 97 percent and 170 percent hikes across three exchanges – LSEG, Euronext, and Deutsche Börse.

It was not a straightforward picture though. Exchanges maintained revenues by charging higher prices to fewer participants for more limited data. This was achieved via “arbitrary and complex fee structures” based on multiple factors, including user type, ranging from broker or agent to competitive status and professional versus retail classification.

They further factored in the number of devices accessing the data and the consumption method. For example, the cost of machine-readable data in 2024 soared between 35 and 97 multiples of the 2017 price for human-accessible data performing the same functions.

In addition, limits were imposed on how exchanges’ market data can be used with clauses preventing clients from including it in non-pre-approved projects. This stymied market growth and innovation because it made it harder for firms to use the information without taking on indeterminate financial risk.

Do regulatory intervention and an EU consolidated tape hold the answers?

Against this backdrop, regulators were asked to step into the breach to redefine trading venues’ objectives and confirm that supporting market growth was their primary goal. Improved financial market transparency in exchange data fees was also highlighted to help clarify the costs imposed by third-party data vendors.

Tanguy van de Werve, Director General of EFAMA, argued that addressing high market data costs was crucial for boosting EU capital market competitiveness. “EU capital markets are underperforming their global peers, a trend that has only solidified over the last few years,” he stated. “Tackling high market data costs should be an obvious choice for policymakers looking to reinvigorate European capital markets.”

Overall, market data costs are a long-running challenge that has occupied the European Union legislative community for years. There is hope that the much-mooted consolidated tape for equities, which would bring data sold by various exchanges under one umbrella, will help drive costs down. Earlier this year, the European Securities and Markets Authority (ESMA) kicked off the selection process for a provider for equities and exchange-traded funds in June, with the final edict at the end of 2025 or early 2026.

Stock exchanges disagree

The report’s conclusions triggered a backlash from exchanges, with both Euronext and Deutsche Börse pointing to the results from an Oxera report published last September, entitled Market Data Fees and Revenues. The report concluded that stock exchange revenues were stable between 2018 and 2023. and that the minimal increases in market data revenues were due to regulatory changes, inflation, and competition for talent.

Euronext added that the “report does not accurately represent market data pricing, notably omitting to account for Euronext’s acquisition of three new markets. For example, the report claims that non-professional user display market data pricing increased by more than 75 percent while in reality, accounting for the new markets integrated within Euronext, it has decreased by 40 percent.”

Euronext also refuted the report’s claim that it underinvests in its equity market. It noted that the exchange group increased its spending on infrastructure by more than 300 percent between 2017 and 2023, and that it had also conducted numerous well-documented upgrades. These included its Optiq trading platform, the migration of its data center to a new green facility, and its clearing migration in 2024.

LSEG also voiced its concerns, stating that “the data presented in the report contains multiple errors and does not accurately present Turquoise’s trading volumes and market data costs.” It cited the example of the claim in the report that said LSEG increased its data fees for private investors by over 150 percent between 2017–2024. It noted that market data for retail investors on Turquoise has always been free and there was no change in the London Stock Exchange (LSE) data charge for this community over this period. Since January 2025, LSE fees for market data for retail have also been waived, it added.