European stock exchanges are becoming increasingly reliant on selling market data to offset declining trading revenues, a trend that industry experts warn could hinder market growth and innovation.
A new study commissioned by five European industry groups, including Efama, the European Fund and Asset Management Association, argues that policymakers should challenge the growing separation of data revenues from trading revenues. The study calls for legislative intervention to ensure that market data is treated as a by-product of trading rather than a standalone commercial asset.
Efama warned that European exchanges are raising data fees to offset falling trading revenues, calling it “a serious problem” for EU capital markets. The study, conducted by Market Structure Partners (MSP), was also supported by AFME, the German investment funds association BVI, and other industry bodies.
‘Case for competition law’
Thomas Richter, CEO of BVI, said the “oligopoly market structures” of European stock exchanges present a case for intervention by competition law authorities. He called for the introduction of an EU Data Vendor Act to regulate the commercial behaviour of exchanges such as Euronext, Deutsche Börse, and the London Stock Exchange Group (LSEG).
“If we don’t address this issue, the already considerable cost pressure in the fund industry will intensify further—to the detriment of consumers,” said Richter in a statement.
AFME CEO Adam Farkas emphasised that accessible market data is “a critical component of healthy and well-functioning capital markets.” He warned that the EU’s plans to improve capital markets could be undermined if the issue is not addressed.
Trading declines, data fees rise
The study highlights a stark divergence in European exchanges’ revenue structures. While equity trading volumes have declined across major exchanges—including Deutsche Börse, Euronext, LSEG, Nasdaq Nordics, and SIX Swiss Exchange—revenues from market data have grown substantially, offsetting lost trading income.
For instance, between 2020 and 2023, Euronext’s transacted equity market value declined by 17 percent, yet total equity market revenues fell by just 0.5 percent, as market data revenues increased from 11 percent to 19 percent of total income. A similar trend was observed at Deutsche Börse, where a 29 percent drop in transacted value was accompanied by only a 12 percent decline in total revenue, thanks to market data revenues rising from 21 percent to 31 percent.
Nasdaq Nordics and LSEG’s Turquoise platform followed the same pattern, with data revenues growing as a proportion of total income despite significant declines in trading activity. The study suggests that this shift effectively shields exchanges from broader market downturns but raises concerns about the fairness and sustainability of their pricing models.
“Market growth has become a secondary objective for stock exchanges,” said Niki Beattie, CEO of MSP. “European policymakers focused on competitiveness and innovation should rigorously challenge the current separation of trading and data revenues at all trading venues.”
‘Extraordinary’ price increases
The study found that the pricing models used by stock exchanges in recent years have led to “extraordinary” price increases. According to MSP, equity data in 2024 was between 35 and 97 times more expensive for a machine to process compared to the cost for a human using the same data for the same activities in 2017.
Since the introduction of the EU’s financial markets law MiFID I in 2007, exchanges have collectively earned at least 6.81 billion euros from market data fees. The study estimates that if market data costs were directly correlated to market share, exchanges leveraging their incumbent status could have generated up to 5.83 billion euros in surplus revenue from market data fees since 2008.
Exchanges have long argued that these costs are essential for maintaining fair and orderly markets.