An effort to challenge certain market data fees in the United States by the securities industry lobby group, the Securities Industry and Financial Markets Association (SIFMA), is moving ahead.

Back in 2008, SIFMA and Internet advocacy group, NetCoalition, filed a lawsuit seeking to set aside a U.S. Securities and Exchange Commission (SEC) decision approving an increase in certain market data fees. The U.S. Court of Appeals for the D.C. Circuit dismissed the petitions, citing a lack of jurisdiction. However, the court did state that the exchanges’ fees can be challenged, so it vacated the SEC order, and sent the issue back to the commission for further consideration.

The SEC has now rejected the exchanges’ procedural arguments objecting to SIFMA’s petition asking the SEC to reconsider the issue. According to the decision, among other things, the SROs argued that the fees do not constitute “denials of access” and, therefore, cannot be challenged under the legislation; and, they argued that SIFMA doesn’t have standing to bring the challenge.

However, the SEC ruled that it does have jurisdiction to consider fee rule challenges. However, it has referred the question of whether SIFMA has established the required jurisdictional elements for its challenge to a judge.

“SIFMA is pleased that the commission is moving forward with our petition… seeking redress for our members from the unfair and unreasonable market data fees charged by the exchanges,” said Ira Hammerman, executive vice president and general counsel at SIFMA. “The commission’s decision today confirms the availability of this process to SIFMA, as a trade association representing its members, and sets an important precedent regarding the procedure for challenging unlawful exchange fees.”

“The commission rejected all of the exchanges’ procedural objections to consideration of SIFMA’s applications, and confirmed that market data fees are subject to challenge,” it says, noting that the proceedings have been referred to an SEC administrative law judge to consider additional evidence on jurisdiction and other substantive issues raised by SIFMA in its petition; and, to hold a hearing following as to whether the fees at issue should be upheld.

The securities industry in Canada has also voiced objections to the rising cost of market data. Recently, regulators proposed changes to trading rules, including a requirement for an annual review of market data fees. Those proposals are out for comment until September 19. (See Investment Executive, CSA publishes proposed changes to Order Protection Rule, May 15, 2014.)