the Nasdaq Stock Market LLC, Et Al . v. Securities and Exchange Commission

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 18, 2022 Decided May 24, 2022
No. 21-1100
THE NASDAQ STOCK M ARKET LLC, ET AL .,
PETITIONERS
v.
SECURITIES AND EXCHANGE COMMISSION ,
RESPONDENT
Consolidated with 21-1101, 21-1102
On Petitions for Review of a Final Rule
of the Securities and Exchange Commission
Thomas G. Hungar argued the cause for petitioners. With
him on the briefs were Paul S. Mishkin, Matthew A. Kelly, Amir
C. Tayrani, Joshua M. Wesneski, Paul E. Greenwalt III, and
Michael K. Molzberger.
Dominick V. Freda, Assistant General Counsel, Securities
and Exchange Commission, argued the cause for respondent.
With him on the brief were Michael A. Conley, Solicitor,

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Daniel Staroselsky, Senior Litigation Counsel, and Brooke J.
Wagner, Senior Counsel.
Before: ROGERS and RAO , Circuit Judges, and RANDOLPH ,
Senior Circuit Judge.
Opinion for the Court by Circuit Judge ROGERS .
ROGERS , Circuit Judge: In 2020, the Securities and
Exchange Commission revised its decades-old regulation
concerning securities market data, which had become largely
obsolete in the face of transformative technological advances.
Petitioners, securities exchanges that also develop and sell
proprietary securities market data products using the data
generated by trades on their respective platforms, challenged
the new Market Data Infrastructure Rule as arbitrary and
capricious and contrary to the goals and policies of the
Securities Exchange Act. The Rule, however, clearly
represents a reasonable balancing of the objectives Congress
directed the Commission to address in a complex and technical
area based on the record before the Commission. Accordingly,
the court denies the petitions.
I.
Section 11A of the amended Securities Exchange Act,
Pub. L. No. 94-29, § 7, 89 Stat. 97, 111 (1975), grants the
Commission broad power to establish a national market system
for the trading of securities. 15 U.S.C. § 78k-1(a)(2); see S.
REP . NO. 94-75, at 7 (1975). Finding that “[i]t is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets” to ensure
“economically efficient execution of securities transactions,”
“fair competition,” and the availability of market data to market
participants, 15 U.S.C. § 78k-1(a)(1)(C), Congress directed the

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Commission to promote the “prompt, accurate, reliable, and
fair collection, processing, distribution, and publication of
information with respect to quotations for and transactions
in . . . securities and the fairness and usefulness of the form and
content of such information,” id. § 78k-1(c)(1)(B).
In recent decades, pursuant to an existing Commission
regulation, the national securities market has operated under a
“centralized consolidation model” for the distribution of
market data. Market Data Infrastructure, 86 Fed. Reg. 18,596,
18,598–99, 18,727 (Apr. 9, 2021). In 2005, the Commission
adopted “Regulation NMS,” 70 Fed. Reg. 37,496 (June 29,
2005), to promote the availability of securities market data to
investors and other market participants. “Because [national
market system] stocks are traded so many places at once, one
of the important innovations of the [national market system] is
to make available to investors a stream of ‘core’ market data
consolidated from all of the exchanges.” NetCoalition v. SEC,
615 F.3d 525, 529 (D.C. Cir. 2010), superseded by statute as
stated in NetCoalition v. SEC, 715 F.3d 342, 344 (D.C. Cir.
2013). Under Regulation NMS, investors could obtain that
“core data” from a centralized securities-information
processor, which acts as a kind of quasi-utility operated jointly
by self-regulatory organizations, including the exchanges, and
the Financial Industry Regulatory Authority. The centralized
securities-information processors receive limited categories of
data from the exchanges, compile it, and transmit it to
subscribers. That data includes key information for each stock:
(1) the price and size of the last sale and the exchange on which
the sale took place; (2) each exchange’s current highest bid and
lowest offer, and the number of shares available at those prices;
and (3) the national highest bid and lowest offer for each stock
on any exchange. To obtain more detailed information about
other transactions on the exchanges, a market participant must
subscribe to the exchanges’ own proprietary data feeds, and

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distribution of their proprietary data is a lucrative business for
the exchanges.
Since the Commission adopted Regulation NMS in 2005
the securities market has evolved dramatically, so that the
proprietary data products developed and sold by the exchanges
themselves are vastly more useful to investors than the more
affordable core data feeds. For example, the exchanges have
developed proprietary data products that deliver data to
subscribers much faster than the core data feeds. Proprietary
products may also contain much more detailed information
about the range of transactions taking place on the exchanges,
rather than just the best bid and best offer quotes. As a result,
the Commission determined, there was an information
asymmetry in the marketplace for securities data — those
market participants relying on the core data feed were at a
significant informational disadvantage to participants that
could afford to subscribe to the exchanges’ comprehensive
proprietary products. In short, the consolidated core data feed
had “not kept pace with the needs of certain market
participants, while the exchanges have expanded the content
and reduced the latency of their proprietary data products in
response to market participants’ needs.” 86 Fed. Reg. at
18,641.
To address this problem, the Commission proposed and
then adopted the Market Data Infrastructure Rule in 2020. The
Rule aimed to “modernize the national market system” by
promoting the development of new data distribution tools. Id.
at 18,604–05. The Rule consisted of two main changes to the
existing market structure in furtherance of this goal. First, the
Rule updated the definition of core data to include more
detailed trading information. Second, it adopted a competitive
model for data feeds other than the one distributed by the
centralized processor. The exchanges (which generate and

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own the underlying trading data) would no longer have a
monopoly on aggregating and distributing that data to
investors. Rather, the Rule compels the exchanges to distribute
that data to competing data consolidators for a fee set by a
committee, consisting of the exchanges and other major market
players and approved by the Commission. The competing
consolidators, who must register with the Commission, may
develop different kinds of data feeds in accordance with market
demand based on the varied needs of investors. The Rule
would also permit market participants to “self-aggregat[e]” by
purchasing raw data directly from the exchanges and
consolidating it for their own internal use. Id. at 18,602.
Certain exchanges challenged the Rule before it was
published in the Federal Register, and the court dismissed the
petitions as premature. Nasdaq Stock Market LLC v. SEC, 998
F.3d 1006, 1007 (D.C. Cir. 2021). Petitioners here challenged
the Rule after it was published in the Federal Register, and the
petitions were consolidated.
II.
The court’s review of the Commission’s Rule is limited to
ensuring that it is not “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
NetCoalition, 615 F.3d at 532 (quoting 5 U.S.C. § 706(2)(A));
see 15 U.S.C. § 78y(b)(4). Arbitrary-and-capricious review is
a “[h]ighly deferential” standard that “presumes the validity of
agency action, requiring [the court] to determine whether the
agency has considered the relevant factors and ‘articulate[d] a
rational connection between the facts found and the choice
made.’” AT&T Corp. v. FCC, 220 F.3d 607, 616 (D.C. Cir.
2000) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

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A.
Section 11A of the Exchange Act authorizes the
Commission to promulgate rules to ensure the “prompt,
accurate, reliable, and fair collection, processing, distribution,
and publication of information with respect to quotations for
and transactions in . . . securities and the fairness and
usefulness of the form and content of such information.” 15
U.S.C. § 78k-1(c)(1)(B). Recognizing that the existing market
under Regulation NMS produced significant “information
asymmetries” between traders who rely on the limited data
available from the centralized processors’ core data feeds and
those who can afford to purchase one or more proprietary data
products, the Commission adopted the Market Data
Infrastructure Rule. 86 Fed. Reg. at 18,725. The Commission
reasonably concluded that the Rule would promote its stated
goal in two primary ways.
First, the Rule adds new categories of data to the definition
of “core data” so that investors who rely on core data will have
information that more closely approximates what is available
to proprietary data feed subscribers. Id. at 18,602. This change
is likely to reduce asymmetries between consumers who rely
only on the consolidated data feed and other consumers by
enhancing the information available to consolidated data feed
subscribers. Currently, only a few data points are available to
consumers relying on core data from the centralized
processors; the Rule changes that by requiring that certain
additional categories of information that are currently only
available through the exchanges’ proprietary data products be
deemed core data. And while petitioners observe that this will
not “eliminate” information asymmetries between users of the
core data feed and users of proprietary products, Petitioners’
Br. 24, the Commission’s stated goal was to “reduce

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information asymmetries,” 86 Fed. Reg. at 18,725 (emphasis
added), not to achieve “absolute parity,” Respondent’s Br. 20.
Second, the Rule introduces competition into the data
market by allowing entities other than the exchanges to develop
and sell data products based on data obtained from the
exchanges. This change is likely to promote the availability of
many different kinds of data products at different price points,
making it more likely that consumers for whom proprietary
data products are prohibitively expensive will find in the
marketplace an affordable product appropriately tailored to
their data needs. The Commission explained that under the
current regime, “the cost of [the exchanges’] proprietary
market data products inhibits the purchase of, and the
widespread dissemination of, this data to market participants
that may need it to participate effectively in the markets.” 86
Fed. Reg. at 18,600. By contrast, under the new regime,
consumers would no longer face a binary choice between
affordable but content-limited feeds and content-rich but
expensive products; instead, in the new competitive
marketplace, consumers would be able to choose from an array
of data products featuring different data at different speeds and
at different price points.
Petitioners nevertheless contend that the Commission’s
adoption of the Rule was arbitrary and capricious for two
reasons: first, according to petitioners, the Rule will
exacerbate, not reduce, information asymmetries in the data
market; and second, in petitioners’ view, the Rule rests on
speculation.
1. Petitioners maintain that the Rule will exacerbate
information asymmetries in several respects. For one thing, the
Rule will further stratify the data market, replacing a two-tiered
system with a multi-tiered system. This stratification of the

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market undercuts the Commission’s goal, rendering the Rule
arbitrary and capricious: If the Commission was concerned
about a two-tiered data market, petitioners maintain, then
surely a multi-tiered data market must amount to an even more
asymmetrical distribution of information. But this objection
misconstrues the Commission’s goal in implementing the Rule,
for the Commission aimed not to require that every market
participant have access to the same data at the same speed, but
rather to address a dearth of options for consumers with widely
divergent data needs in the existing marketplace. See id. at
18,767. The Rule promotes the Commission’s purpose by
assuring that consumers who cannot afford existing proprietary
data products are no longer limited to the consolidated feed as
their only option.
Nor will the Rule’s allowance for large firms to “self-
aggregate” data for internal use exacerbate information
asymmetries. Under the new regime, a small number of major
players in the securities market would have the option to self-
aggregate market data by purchasing raw data directly from the
exchanges and aggregating it for their own internal use, rather
than purchasing a prepackaged data product from one of the
competing consolidators. Petitioners see self-aggregators
gaining an additional speed advantage over all other market
participants, because they would receive data faster by cutting
out the middleman. Feed subscribers, by contrast, must wait to
receive aggregated data from a third-party consolidator, which
self-aggregators avoid. But the Commission explained that
“[l]atency sensitive customers of competing consolidators,”
that is, customers whose trading strategies depend on split-
second data advantages, “are likely to be co-located in the same
data centers as their competing consolidators, so the
transmission time between the servers of the competing
consolidator and its customer will be exceedingly small.” Id.
at 18,648. What is more, the Commission has consistently

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explained that “big firms already act as self-aggregators” under
the current regime. Respondent’s Br. 23; see 86 Fed. Reg. at
18,599. Petitioners have not explained why any latency
advantages enjoyed by self-aggregators would be more
significant under the new Rule than the previous regime.
Petitioners also maintain that the Rule will exacerbate
another problem the Commission claimed it would address:
market resiliency. In adopting the Rule, the Commission noted
that a competitive system with multiple consolidators would
eliminate single points of failure in the system, i.e., the
centralized securities-information processors. Petitioners
contend that consumers would actually be more prone to
disruptions in their access to data under the new system,
because each competing consolidator would represent a single
point of failure with respect to its own customers. But this
misses the Commission’s point, which was that eliminating
single points of failure would “improve the resiliency of the
national market system” as a whole, not that it would guarantee
that individual consumers could never experience outages or
disruptions in their access to data. 86 Fed. Reg. at 18,661
(emphasis added). The Commission explained that competing
consolidators will face twin pressures — regulatory
requirements “designed to support their operational resiliency”
and competition with each other — that will encourage
resiliency and reliability. Id.
2. Petitioners also maintain that the Rule rests on
unfounded speculation, rendering it arbitrary and capricious.
But a concern that too few competing consolidators would
enter the market to achieve the anticipated benefits of
competition is misplaced: The Commission acknowledged that
there was some uncertainty about the number of entrants to the
market, but exhaustively explained why it predicted that the
market would see “a sufficient number” of entrants to promote

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competition, id. at 18,761. That analysis considered the
barriers to entry for would-be competing consolidators, id. at
18,761–63; the anticipated fees to be charged for the
underlying data the consolidators would purchase, aggregate,
and sell, id. at 18,763–64; the fixed “connectivity” costs to
competing consolidators, i.e., the fees charged to cover the cost
of transmitting the underlying data to the competing
consolidators, id. at 18,764; the anticipated demand for the
competing consolidators’ data products, id. at 18,764–66; and
the competing consolidators’ ability to offer differentiated data
products, id. at 18,766–68. That was more than sufficient,
because “when an agency’s decision is primarily predictive . . .
[the court] require[s] only that the agency acknowledge factual
uncertainties and identify the considerations it found
persuasive.” Am. Hosp. Ass’n v. Azar, 983 F.3d 528, 536 (D.C.
Cir. 2020) (quoting Rural Cellular Ass’n v. FCC, 588 F.3d
1095, 1105 (D.C. Cir. 2009)).
Similarly, the Commission reasonably predicted that only
a small number of market participants would become self-
aggregators, leaving enough demand for the competing
consolidators’ products to achieve the benefits of competition.
Petitioners point out that while the absolute number of self-
aggregators might be small, the firms positioned to self-
aggregate — an expensive and technically complex endeavor
— likely represent a large segment of the total demand for
market data. Again, however, the Commission recognized this
possibility, observing that “while the number of potential self-
aggregators might be small their overall trading volume might
be large, because these market participants are also likely some
of the highest trading-volume broker-dealers and registered
investment advisors.” 86 Fed. Reg. at 18,766. On balance, the
Commission nevertheless concluded that the predicted demand
for the competing consolidators’ products outweighed
concerns that self-aggregation might eat into the market; that

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satisfied the Commission’s obligations, Am. Hosp. Ass’n, 983
F.3d at 536, especially where the agency had to strike a balance
between competing statutory objectives of efficiency,
competition, and transparency, see 15 U.S.C. § 78k-1(a)(1)(C);
Fresno Mobile Radio, Inc. v. FCC, 165 F.3d 965, 971 (D.C.
Cir. 1999); see also Chevron U.S.A., Inc. v. Nat. Res. Def.
Council, Inc., 467 U.S. 837, 845, 865 (1984); Concept Release
on Equity Market Structure, 75 Fed. Reg. 3594, 3597 (Jan. 21,
2010).
Finally, petitioners maintain that, although the
marketplace for data products can only succeed if competing
consolidators offer differentiated products, namely, a variety of
products with different categories of data, different levels of
analytics, and different speeds, the Commission could only
guess at whether they would be able to do so, since the fees to
obtain the exchanges’ raw data have not yet been set. Fees that
are too high, petitioners maintain, may make it infeasible for
competing consolidators to offer more affordable, less detailed
data feeds given the high up-front cost to purchase the raw data.
The Commission acknowledged that competing consolidators’
ability to differentiate their products and charge different prices
would depend partly on whether the national-market-system
plans, which will determine data fees, set differentiated prices
for different subsets of data or, rather, offer only
comprehensive data at a single price point. 86 Fed. Reg. at
18,764, 18,767. But petitioners overstate matters when they
suggest that the success of the new regime depends entirely on
fee differentiation; the Commission reasonably concluded that
the fact that comprehensive data will remain available at
different speeds for different prices provides built-in
differentiation, and even in the absence of any differentiation,
demand for less expensive data products could make it
worthwhile for a competing consolidator to purchase
comprehensive data and repackage it as a subset of that data.

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Id. at 18,767–68. Further, the existing equity data plans, of
which petitioners are governing members, have already
proposed just such a differentiated fee structure, which the
Commission is currently considering.
On arbitrary-and-capricious review, the court’s role is
“‘not to substitute its judgment for that of the agency,’ but
instead to assess only whether the decision was ‘based on a
consideration of the relevant factors and whether there has been
a clear error of judgment.’” DHS v. Regents of Univ. of Cal.,
140 S. Ct. 1891, 1905 (2020) (citations omitted). The Rule’s
design promotes the Commission’s stated goals and is
grounded in the record before the Commission. Accordingly,
petitioners have not shown that the Rule is arbitrary and
capricious.
B.
The Exchange Act requires the Commission to act with
“due regard for the public interest, the protection of investors,
and the maintenance of fair and orderly markets,” and to assure
the “fair collection” and “distribution” of market data. 15
U.S.C. § 78k-1(a)(2), (c)(1)(B). When the Commission
engages in rulemaking under the Exchange Act that requires it
to consider “whether an action is necessary or appropriate in
the public interest,” it must also consider “the protection of
investors” as well as “whether the action will promote
efficiency, competition, and capital formation.” 15 U.S.C.
§ 78c(f). An agency’s duty to consider economic impacts does
not necessarily require a precise cost-benefit analysis, see Nat’l
Ass’n of Home Builders v. EPA, 682 F.3d 1032, 1039 (D.C. Cir.
2012); this court has recognized that the Commission “need
not . . . base its every action upon empirical data,” Chamber of
Commerce v. SEC, 412 F.3d 133, 142 (D.C. Cir. 2005), and
may reasonably conduct “a general analysis based on informed

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conjecture,” id. (quoting Melcher v. FCC, 134 F.3d 1143, 1158
(D.C. Cir. 1998)).
Petitioners maintain that the Rule is inconsistent with these
statutory policies because it will deprive investors of a single,
uniform “national best bid and offer” quote; stifle innovation
in the data market; drive order flow to off-exchange “dark”
trading venues and impede exchanges’ ability to compete with
such venues; and deprive the exchanges themselves of a main
source of revenue. In petitioners’ view, the Commission failed
to adequately account for these outcomes, violating its
statutory duties to weigh the Rule’s economic impacts, to
protect investors and the public interest, and to promote the fair
collection and distribution of market data. The record
demonstrates that the Commission considered each of
petitioners’ concerns and reasonably determined, based on the
information available to it, that the Rule was warranted.
1. The Commission reasonably concluded that the Rule
would not adversely affect the availability of a single, reliable
“national best bid and offer” quote to the detriment of retail
investors. The national best bid and offer is a data point
reflecting the highest price currently being offered by a buyer
and the lowest price currently being offered by a seller for a
given security across all exchanges. See Market Data
Infrastructure, 85 Fed. Reg. 16,726, 16,732 n.66 (Mar. 24,
2020). Petitioners maintain that the existence of a single,
uniform national best bid and offer is critical for retail
investors, who, unlike large broker-dealers, rely on visual stock
quotes posted publicly to ensure they are getting the best price
available. By decentralizing market data, petitioners believe,
the Rule would eliminate the uniform national best bid and
offer, leaving multiple quotes circulating at any given time and
thus harming retail investors.

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The Commission explained, however, that this exact kind
of fragmentation already exists under the current regime: some
market participants rely on the national best bid and offer as
calculated by the exclusive processors, while others
“calculat[e] their own version by aggregating petitioners’ faster
proprietary-data feeds or hiring a third-party vendor to
aggregate the data for them,” Respondent’s Br. 42 (citing 86
Fed. Reg. at 18,657), and still others, including some retail
investors, use “top-of-book” proprietary data products, which
may be less expensive than the centralized processors’ data, 86
Fed. Reg. at 18,601. Further, inherent delays in transmitting
data to different geographic locations will always result in
multiple quotes circulating at any given time. Id. at 18,737,
18,785. Yet petitioners have not explained how the national
best bid and offer quote would be appreciably more fragmented
under the new Rule than it is under the current regime.
2. The Commission could reasonably conclude that
increased competition in the development and distribution of
data products would enhance, not stifle, innovation. Petitioners
claim that the Rule undermines the exchanges’ incentive to
invest in developing innovative data products. But petitioners’
narrow focus on their own incentives ignores the broader
context in which the Commission adopted the Rule: By
permitting other entities besides exchanges to offer data
products, the Rule would promote innovation in the broader
data market and is designed to encourage a proliferation of new
data products.
3. The Commission reasonably concluded that the Rule
would promote competition notwithstanding the possibility
that off-exchange “dark” trading venues could improve their
competitive position under the new regime. Securities are
traded not only on the highly regulated exchanges (so-called
“lit” venues), but also on other off-exchange trading venues

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(“dark” venues) that are subject to different regulatory
requirements and that may not disclose the same data about
trades executed there. According to petitioners, the Rule’s
anticipated impact on exchanges’ revenue from their
proprietary data products will inhibit their ability to compete
with off-exchange venues, contrary to the Exchange Act’s
commitment to promoting competition. In turn, petitioners
contend, the increase in order flow to the less-regulated dark
venues will reduce transparency in the marketplace as a whole.
Petitioners contend the Commission’s failure to address these
concerns adequately was an abdication of its duty to “apprise
itself – and hence the public and the Congress – of the
economic consequences of a proposed regulation.” Bus.
Roundtable v. SEC, 647 F.3d 1144, 1148 (D.C. Cir. 2011)
(quoting Chamber of Commerce, 412 F.3d at 144).
Petitioners’ contention that the Commission “duck[ed]
serious evaluation of the costs” the Rule would impose on
competition, Petitioners’ Br. 45 (quoting Bus. Roundtable, 647
F.3d at 1152), rests on a fallacy: Petitioners equate competition
with their own competitive position. But a policy change can
“disadvantage certain participants while simultaneously
enhancing competition in the market.” U.S. Dep’t of Justice,
Comment Letter on Proposed Rule, Market Data Infrastructure
4–5 (May 26, 2020). The Commission undertook an analysis
of the likely effects of the Rule on competition, including the
possibility that “the impact of . . . potential reductions in
proprietary feed subscriptions could be large” for some
exchanges, resulting in a sizable reduction in revenue. 86 Fed.
Reg. at 18,794. The Commission nevertheless concluded that
the Rule would promote “fair competition,” 15 U.S.C. § 78k-
1(a)(1)(C)(ii), and explained in detail why such competition
would ultimately benefit investors, see 86 Fed. Reg. at 18,799–
804. This is therefore not a case where “the Commission’s
prediction . . . had no basis beyond mere speculation,” Bus.

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Roundtable, 647 F.3d at 1150; on the contrary, the Commission
made “a reasonable predictive judgment based on the evidence
it had,” FCC v. Prometheus Radio Project, 141 S. Ct. 1150,
1160 (2021). To the extent petitioners maintain the
Commission was required to quantify each individual
exchange’s anticipated revenue decreases under the Rule, this
court has explained that the Commission need not “base its
every action upon empirical data.” Chamber of Commerce,
412 F.3d at 142.
In any event, petitioners’ concern that the Rule will hurt
exchanges’ bottom line is speculative. The Commission
explained that the Rule may or may not cause a reduction in
revenue for the exchanges; any losses may be partially or fully
offset by the fees paid to exchanges by competing
consolidators for their data and by the opportunity for the
exchanges to continue to sell some version of their existing
proprietary data products. 86 Fed. Reg. at 18,784, 18,794.
4. As for the purported downstream effects of any
reduction in revenue, the Commission reasonably rejected
petitioners’ concerns that their own lost profits would harm the
marketplace as a whole. The Commission considered the
possibility that the Rule would drive order flow to off-
exchange venues and concluded that any resulting harm to
overall market transparency would be offset by the other
transparency benefits of the Rule, including the improved
distribution and enhanced content of core data. Id. at 18,799.
Indeed, the heart of the Rule was expanding the content and
improving the distribution of core data, which “is the principal
tool for enhancing the transparency of the buying and selling
interest in a security.” Id. at 18,599 n.22; see also id. at 18,799.
The Commission also reasonably predicted that expanded core
data could decrease the incentive to trade on off-exchange
venues and cause orders to flow away from those “dark”

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venues to the more transparent exchanges. See 86 Fed. Reg. at
18,748, 18,759. Even if petitioners could somehow show that
the net effect of the Rule on transparency would be negative,
that would still not suffice, as transparency is not the only aim
of Section 11A. Rather, Congress also directed the
Commission to consider impacts on competition, among other
things, and the Rule represents a reasonable balancing of those
competing goals. This court has “never required anything
more” of an agency than to weigh costs and benefits and to
make “reasonable trade-offs,” Covad Commc’ns Co. v. FCC,
450 F.3d 528, 543 (D.C. Cir. 2006) (quoting U.S. Telecom
Ass’n v. FCC, 290 F.3d 415, 425 (D.C. Cir. 2002)), and the
Commission did so here.
Likewise, petitioners’ claim that reduced revenues will
cripple their reinvestment in their own products, hurting their
customers, defies basic economic principles. The Commission
points out that like any business, the exchanges can obtain
external funding for promising opportunities to develop new
products in the future; they are not limited to their internal cash-
on-hand in developing new products and services. Similarly
unavailing is petitioners’ suggestion that “[a] reduction in
market-data revenue would also limit the funds available to
exchanges to fulfill their statutorily mandated regulatory
responsibilities, which further ‘the protection of investors’ and
the ‘maintenance of fair and orderly markets’ . . . .”
Petitioners’ Br. 54. The notion that any reduction in revenue
would necessarily compromise the exchanges’ bottom line so
severely as to affect their ability to comply with their regulatory
responsibilities is unsubstantiated.
All in all, the Commission acted well within its authority
when it evaluated the Rule’s anticipated benefits against the
possibility of harm to petitioners’ respective bottom lines. This
court declines to re-weigh the technically complex trade-offs

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the Commission carefully considered. See Am. Hosp. Ass’n,
983 F.3d at 536; Fresno Mobile Radio, Inc, 165 F.3d at 971.
Accordingly, for the foregoing reasons, the petitions are
denied.

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