The SEC in 2020 approved new rules governing public data feeds that it said would also improve transparency and address inefficiencies in the collection and dissemination of the data, following years of complaints by brokers that the exchanges that control the data are conflicted in their role.

Nasdaq Inc, Intercontinental Exchange Inc's NYSE unit, and Cboe Global Markets, opposed the plan, which allows firms other than the exchanges to develop and sell data products based on data obtained from the exchanges.

The exchange groups, which together run 12 of the 16 U.S. stock exchanges, argued the new rules were contrary to the goals and policies of the Securities Exchange Act.

In denying the exchanges' petition against the SEC, a three-judge panel on the U.S. Circuit Court of Appeals for the District of Columbia said the SEC's rule "clearly represents a reasonable balancing of the objectives Congress directed the Commission."

The exchanges were put in charge of the data feeds, which show current best prices and last trades for stocks, before they were for-profit companies and the rules were last updated in 2005.

Since then, exchanges have created faster, more sophisticated proprietary data feeds that compete against the public feeds. Many larger brokers say they need to pay for those private data feeds, often more expensive than the public ones, in order to remain competitive, and that this has created a two-tiered market.

(Reporting by John McCrank; Editing by Bernadette Baum)

By John McCrank