14.III.2 Profits a data supplier can make

Even if one is able to determine the costs of producing and disseminating equity pre- and post-trade data, one can question to which extent the data supplier (e.g. an RM or data vendor) can make profits. On one side of the spectrum, it can be argued that in a free market it is up to the data supplier to decide on the profits it wants to make. Depending on the value of the data, as well as a fair balance between data prices in relation to the costs (of production), the data supplier can ask the price deemed fit.1 On the other side of the spectrum, one could say that data needs to be made available free of charge. The argument is that equity pre- and post-trade data is invaluable for investors (public good-argument).2 Although understandable, the main disadvantage of a free of charge-approach is the potential lack of incentives for data suppliers to ensure high quality data (accurate, timely, and so forth).3 An intermediate approach would be to reduce the profits of data suppliers. One argument for an intermediate approach is that the interests of data suppliers are not always aligned with data users, in particular due to the so-called demutualisation process (e.g. an RM previously owned by members nowadays being owned by shareholders). The argument here is that the interest of the shareholders is not aligned with the interest of the members of the data supplier (e.g. RM). In effect, the perspective is that the profits of a data supplier should not be maximal.4 In sum, there are different perspectives one can take on the ‘reasonableness’ of equity pre- and post-trade data prices.