[[Photo: Brad Katsuyama / theverge.com]

Upstart stock exchange IEX Group has begun distributing a key market-data feed free over the internet, throwing down a gauntlet to rivals such as the NYSE and Nasdaq, for which such data feeds are a big source of revenue. The web-based tool broadcasts the best price at which traders in its marketplace are willing to buy or sell a stock or ETF, along with the last price at which that stock or ETF was traded on IEX.

The impact of IEX’s announcement may be largely symbolic. Only about 2% of U.S. equities trading takes place on the startup exchange, and much of the time, the prices displayed on other exchanges are better than those being quoted on IEX.

Until now, people who wanted such “top-of-book” data from IEX had to get it from a 3rd party, which would typically charge for it, or set up a direct connection with IEX, which could involve hefty technology costs, even though IEX itself has a policy of giving away its market data free.

The move comes as banks and electronic trading firms have become increasingly critical of NYSE and Nasdaq for the mounting costs of the exchanges’ market data feeds and the computer linkups needed to connect to them.

Intercontinental Exchange Inc. (ICE), the parent company of NYSE, and Nasdaq have said their data and connectivity fees are reasonable and justified. Last year, a judge at the SEC dismissed a legal challenge from a Wall Street industry group that had attacked the 2 exchange groups’ pricing policies as monopolistic.

“Legacy stock exchanges obstruct transparency and create an uneven playing field by overcharging for market data on orders they did not create.” - - IEX Co-Founder & CEO Brad Katsuyama said in press release.