Web sites await SEC on real-time stock quotes

By Karey Wutkowski

WASHINGTON (Reuters) - Internet finance sites run by Google Inc and Yahoo Inc have been waiting months for regulatory permission to start offering free, real-time U.S. stock quotes.

But questions over how much the stock exchanges can fairly charge Web sites for trading data has the U.S. Securities and Exchange Commission in the middle of a thorny debate over whether the market for such data is competitive and whether the charges will discriminate against smaller Internet sites.

Katie Stanton, a Google group product manager, said the Google Finance site won approval from two Chinese exchanges in Shanghai and Shenzhen to carry real-time quotes last month and almost immediately saw a leap in demand for that service.

Access to real-time stock quotes is the No. 1 demand of users of the Google finance site, Stanton said, and Google would like to offer a number of related tools to help consumers manage their investments.

"You can get real-time sports scores, weather, news, but you still can't easily get real-time stock market data," she said. "We should have had this ages ago."

As part of the SEC's regulation of U.S. stock exchanges, the agency has the power to approve new products they offer for sale, including market data.

"We're falling behind the rest of the world here," said Ron Jordan, senior vice president of NYSE Euronext's U.S. market data. "The fact that China can introduce real-time prices into the United States before the NYSE can is ridiculous."

Currently, most Internet sites not associated with a broker show U.S. stock quotes with a 15- or 20-minute delay unless users pay a fee. The delay allows the sites to avoid a "device fee" charged to customers for real-time data.

REAL-TIME QUOTES AT A PRICE

The major exchanges are keen to sell Web sites real-time, last-sale stock prices for a monthly fee, as new securities regulations make market data distribution easier. The sales would add to profits at a time of increased competition among global exchanges.

The NYSE and Nasdaq filed the real-time proposals with the SEC in January.

Supporters said they expected swift SEC approval. But they soon realized they had to wait until the SEC acted on a more contentious plan from NYSE Arca, NYSE's online exchange.

In May 2006, NYSE Arca said it had gained enough market share to stop giving away some of its real-time trading data for free, and proposed to start charging Internet sites a monthly per-user fee. But Web sites balked at what they considered excessive fees and an administrative nightmare to track users.

Google and Yahoo banded together with Bloomberg LP and CNET Networks under the umbrella of NetCoalition, an Internet industry group, saying for-profit exchanges had monopolistic control over their data and were trying to charge unfair prices.

The coalition argues the exchanges have an obligation to follow securities regulations that call for market data to be distributed at a "fair and reasonable" rate.