The Capital Group Companies, Inc.
333 South Hope Street
Los Angeles, California 90071-1406
VIA ELECTRONIC SUBMISSION
June 2, 2020
Ms. Vanessa Countryman
U.S. Securities and Exchange Commission
100 F Street NE
Washington, DC 20549
Re: Market Data Infrastructure (File No. S7-03-20)
We appreciate the opportunity to respond to the United States Securities and
Exchange Commission's (the "Commission") request for comments on proposed
amendments to 17 CRF 242, Rules 600 and 603 and adoption of new Rule 614 of
Regulation National Market System (the "Proposal") under the Securities Exchange Act
of 1934 ("Regulation NMS").1
The Capital Group Companies is one of the oldest asset managers in the United
States. Through our investment management subsidiaries, we actively manage assets in
various collective investment vehicles and institutional client separate accounts globally.
The majority of these assets consist of the American Funds family of mutual funds, which
are U.S. regulated investment companies managed by Capital Research and
Management Company, distributed through financial intermediaries and held by
individuals and institutions across different types of accounts. The American Funds is
one of the nation's oldest mutual fund families which invests approximately $1.8 trillion
in assets for more than 50 million shareholder accounts.
We commend the Commission for its thoughtful Proposal and strongly support
the Commission's ongoing efforts to modernize U.S. equity market structure, including
the collection and dissemination of equity market data in national market system
("NMS"). We believe that the consolidated market data available via the Consolidated
Tape Association Securities Trade Processor ("SIP") is an essential feature of the U.S.
securities exchange and non-exchange venue landscape. The accessibility of trade and
quote data in a manner that is prompt, accurate, and reliable is critical to fair markets
and contributes significantly to the United States' leading position in global equity
1 Securities Exchange Act Release No. 88216, 85 FR 16726 (Mar. 24, 2020) available at:
markets. As the Proposal notes, "the structure of the equity markets has changed
dramatically since the Commission adopted the rule now known as Regulation NMS in
2005."2 We agree with the Commission's view that significant changes in market
structure since the adoption of Regulation NMS require the Commission to newly
address the form and content of consolidated market data distribution. We believe that
any final rule should aim to create a SIP that is a viable alternative to the exchanges'
Over the last 15 years, the discrepancy in data elements and latency between
proprietary feeds and the consolidated tape has expanded such that the SIP is no
longer a realistic tool for institutional investors or broker-dealers in meeting their
respective best execution obligations when routing orders. We believe that the
measures set forth in the Proposal are meaningful improvements to the current NMS
plan and will significantly close the gap between existing proprietary feeds and the
consolidated tape. We also believe that a final rule that expands core data and allows
competing consolidators will allow broker-dealers to utilize the consolidated tape when
routing decisions for most client orders in accordance with best execution obligations.
In this regard, we generally support the comments submitted by the Investment
Company Institute and offer our views on certain aspects of the Proposal in this letter.
Proposed Definition of "Consolidated Market Data"
We support the expansion and modernization of the content of NMS information
and agree with the proposed amendment to Rule 600(b) to include core data,
regulatory data, administrative data, exchange specific program data and additional
data required under Rule 603(b) of Regulation NMS. Expanding the scope of NMS
information will support more informed trading and reduce information asymmetries
between market participants and, therefore, align the effectiveness of the SIP and
proprietary feeds. Also, the addition of these elements to historical data will help
enhance post trade analysis in support of best execution obligations.
Proposed Definition of "Core Data"
We largely agree with the proposed definition of Core Data but believe that
certain adjustments would meaningfully improve the effectiveness of the Proposal.
Auction Information and Depth of Book Data
We support the addition of auction and depth of book data to the definition of
Core Data. Auctions represent over 10% of US daily volume. Because auction data is
only available through proprietary feeds today, in order to access this volume in an
intelligent manner we must purchase data feeds directly from the exchanges. Adding
this information to the SIP would be a meaningful improvement. With respect to depth
2 See Proposal, supra note 1.