Nasdaq to Cut Charges on Real-Time Data

The Nasdaq Stock Market plans to charge market-data vendors 80% less for real-time, detailed information aimed at retail investors in the expectation these savings will be passed along to those investors, a spokesman said Monday.

The board of Nasdaq’s parent, the National Assn. of Securities Dealers, last week approved a one-year pilot program reducing the “nonprofessional” subscriber fee to $10 a month from $50 a month, said market spokesman Scott Peterson.

Data vendors such as Bridge Information Services Inc. and Bloomberg, the parent of Bloomberg News, pay the fee for the computer subscription service based on the number of retail customers they have, Peterson said. The service, called Nasdaq Level 2, provides the names of market makers and electronic communication networks and instantaneous information on their quotes on securities traded through Nasdaq.

The vendors, in turn, provide this information to their subscribers. About 120,000 retail and institutional investors get access to Nasdaq Level 2 information in this way, Peterson said. In billing the market-data vendors, Nasdaq takes into account how many retail--as opposed to institutional--customers the vendor serves.

“By slashing the cost for individual investors and other nonprofessionals to access Nasdaq market data to just $10 per month, we continue our ongoing effort to provide investors with the most information possible at the lowest price,” said NASD Chairman Frank Zarb.