H. Pim Goodbody, Jr.
38 East Curlis Avenue
Pennington, NJ 08534

March 28, 2000

Jonathan G. Katz
Securities and Exchange Commission (SEC)
450 Fifth Street, NW
Washington, DC 20549-0609

Re: File No. S7-28-99 - Regulation of Market Information Fees and Revenues

Market Data Should Be Free!

Dear Sir:

The purpose of this letter is to encourage the Commission to think a bit more expansively or "outside the box" than its release inviting comments reflects. At a time when the very structure of the world's capital markets are undergoing the most fundamental changes, now is when related elements of the financial puzzle need to be looked at in fundamentally different ways. I hope you'll agree.

Market Data Should Be Free!

Rather than tinker with how to price market data, why not simply make it free? This is the ideal solution to most of the issues your release raises and has many advantages:

Related Issues:

Creation of a Market Data Utility

The distribution of market data is crucial to the effective operation of the U.S capital markets. Accordingly, wouldn't it be a good idea to establish a "market data utility" with the responsibility to pick up feeds from all market makers (exchanges, ECNs and firms) and distribute integrated information to all comers? This new organization, for example, could be part of or affiliated with The Depository Trust & Clearing Corporation (DTCC). Its only role would be to take the feeds from all providers and redistribute the information. DTCC would simply determine its costs and charge them out to users in some logical way, as it does for all of its services. These costs will be solely those of gathering and distributing information and, therefore, should not be very great and should not be increasing over time. This would envision all market data (e.g., bonds, equities, options, etc.) being distributed by this dedicated organization.

Scrubbing of Market Data - This is an issue not mentioned in your release that bears some attention. Apparently, all recipients of market data feeds have created software that screens the incoming stream of market data for bad information and makes certain fixes; e.g., a bad trade price would be caught and adjusted. This decentralized and little publicized activity would be better performed within the proposed market data utility, thereby assuring greater uniformity of market data distributed and perhaps some other efficiencies. The more automated the markets become, the more correct the market data distributed needs to be.

Some Fall Back Ideas

There are a number of ways that the SEC could move this whole area in the right direction without making the decision to make market data free. Here are a few thoughts on some:

The SEC is to be commended for its willingness to look into the whole area of market data fees and raise a number of fundamental issues. The significant changes that are underway throughout the U.S. capital markets argue for a bolder approach than that raised in your release. I hope this letter contributes to that happening.


Market Data