Outside of labor, the primary costs are hardware, colocation, and networking, none of which is a fee to the exchange.
Please tell, how the world is supposed to provide that for free to anyone who wants it?
Colocated servers are the public.
Please tell, how the world is supposed to provide that for free to anyone who wants it?
Colocated servers are the public.
The consolidated feeds are necessarily slower than the direct feeds, due to processing delays, unless the exchanges intentionally slow down their direct feeds. There are several companies that will sell you expensive FPGA or IBM Cell-based cards that will locally create a consolidated feed from all of the direct feeds. These cards aren't cheap, but are necessary for trading latency arbitrage strategies, and are also useful for low-latency market making.
Of course the consolidated feed requires a slight processing delay, so unless they intentionally slow down the direct feed, quotes from NYSE will appear first in the direct feed and very slightly later in the SIP feed. The argument here is about if the delay between SIP and the direct feed is small enough to be permissible.
The "public" being talked about is the paying public. Nothing in the regulation requires a free SIP feed, and I assure you NYSE doesn't provide a free real-time SIP feed. The regulation is to prevent selling an intentionally slow connection to everyone, and giving a faster feed to only their top tier customers.
Disclaimer: I'm not a lawyer.
Pretty simple.
The exchanges take in $500M a year in SIP fees, which are supposed to go to the most efficient hardware and software available. Pretty sure that's not happening.
Oversimplification, forgetting the laws of geometry and physics.
The triangle inequality and relativity conspire against the SIP. If you're getting the SIP from B, any new prices at C go to B and then forwarded to you, so it's faster (best case equal in the degenerate triangle case) to get direct feeds from B and C and consolidate locally.
I was just pointing out that
> If a private company can consolidate faster than the SIP, then the SIP isn't using the most efficient hardware and software available now is it?
is faulty reasoning.
But the law's the law. "It doesn't make sense" isn't a valid defense.
Usually due to capex: energy infrastructure, network effect: financial, or limited availability of resources: wireless spectrum.
If it's in the public interest to have trucks and no firewood seller would otherwise provide them. That's absolutely something government can (and IMHO should) mandate in exchange for a firewood license.