By Chuck Mikolajczak

By Chuck Mikolajczak

NEW YORK (Reuters) - A U.S. judge dismissed a long-simmering legal battle over the cost of market data that is used by brokerages and high-speed trading firms, in a victory for the New York Stock Exchange and Nasdaq.

The Securities Industry and Financial Markets Association (SIFMA) had challenged whether fees charged by the two exchanges to traders, including a fee increase in 2010, for proprietary equity market data were justified due to an alleged lack of competition.

The NYSE, a unit of Intercontinental Exchange Inc <ICE.N>; Nasdaq <NDAQ.O> and Bats Global Markets <BATS.Z> charge fees for the data, with NYSE Arca's "ArcaBook" and Nasdaq's "Level 2" products at the heart of the issue.


Market makers and brokerages have complained that the cost of market data, which has profit margins of 70 percent or more, is prohibitive. Prices for market data must be "fair and reasonable," according to securities regulations.

Administrative law judge Brenda Murray of the U.S. Securities and Exchange Commission found significant competitive forces constraining the price of depth-of-book data, and said in her June 1 order that assertions that the fees increased overall costs for ordinary investors was unsupported.

The order was made public on Tuesday.

"We are reviewing the decision in detail with our counsel and evaluating all of our legal options," said Ira Hammerman, executive vice president and general counsel for SIFMA.

The fight against the exchanges started in 2006, when a coalition of internet companies filed a challenge against NYSE Arca after it won approval from the SEC to implement a new rule to start charging fees. SIFMA later joined the dispute.

The NYSE was pleased by the decision, a spokeswoman said. A Nasdaq spokesman declined to comment.

(Additional reporting by Herbert Lash; Editing by Bernard Orr)

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