Erosion risks

• Regulatory interventions affecting clearing models or margin rules
• Operational or cyber incidents impairing confidence
• Loss of key product franchises to rival exchanges

Leading indicators

• Cleared volumes and open interest by asset class
• Clearing member concentration and defaults or near-defaults
• Regulatory actions impacting CCP requirements

Counterarguments

• Some products can migrate if fee or margin economics worsen versus peers
• Clearing is regulated and subject to policy change; entrenchment is not absolute

Erosion risks

• Regulatory reforms lowering barriers or enabling new venues
• Political pressure on market structure and fees
• Cross-border equivalence decisions limiting access to CCP services

Leading indicators

• Changes to exchange and clearing regulatory frameworks (US/UK/EU)
• Material enforcement actions or license challenges
• Cross-border equivalence outcomes for CCP access

Counterarguments

• Regulation can also constrain pricing and product design
• In some market segments, competition is more about liquidity and product innovation than licensing alone

Erosion risks

• Fragmentation from alternative trading venues
• Competitive fee incentives shifting flow
• Technology latency advantages by rival venues

Leading indicators

• Market share trends in key contracts and venues
• Depth and liquidity metrics and spreads
• Connectivity, latency, and colocation adoption

Counterarguments

• Order flow can be transient and price-sensitive, especially in commoditized products
• Regulatory structure (e.g., order routing rules) can redirect liquidity

Erosion risks

• Prolonged IPO downturn reducing issuer demand
• Competition from Nasdaq and other venues for marquee listings
• Reputational damage from market incidents or outages

Leading indicators

• Net new listings and retained listings
• Share of U.S. IPO proceeds on NYSE vs peers
• ETF listing AUM trends

Counterarguments

• Issuers can switch venues; incremental benefits may be small for some companies
• Listing decisions can be driven by pricing incentives and market cycles more than brand

Erosion risks

• Customers standardizing on rival platforms (e.g., Bloomberg, Refinitiv)
• Open-source and alternative data reducing dependency
• Budget pressure driving vendor consolidation and renegotiations

Leading indicators

• Annual Subscription Value (ASV) growth and retention
• Net revenue retention on data subscriptions
• Client wins and losses in evaluated pricing and indices

Counterarguments

• Many firms multi-home data vendors; lock-in may be weaker than pure software
• Large clients can negotiate pricing aggressively and switch over time

Erosion risks

• Commoditization of pricing data
• Regulatory shifts changing valuation or price transparency requirements
• Rival datasets improving or bundling aggressively

Leading indicators

• Coverage expansion (securities, countries, asset types)
• Accuracy and latency metrics and client renewals
• Index licensing growth

Counterarguments

• Coverage breadth does not always translate to pricing quality in illiquid instruments
• Top competitors can replicate coverage with enough investment

Erosion risks

• Competing connectivity providers and commoditized transport
• Cloud-based market data distribution reducing reliance on private networks
• Price competition in connectivity and feeds

Leading indicators

• Venue/data-source count and usage
• Latency performance and uptime metrics
• Cross-sell rates from connectivity into data/desktop

Counterarguments

• Connectivity can be swapped if service becomes a commodity
• Large clients may build direct connections and reduce dependence

Erosion risks

• Fintech entrants unbundling workflow steps
• Customers pushing for open standards and portability
• Mortgage volume downturn reducing customer spend and seat counts

Leading indicators

• Closed-loan transaction volumes on the platform
• Net retention of SaaS subscriptions
• Implementation and upgrade cycle duration and churn

Counterarguments

• Large lenders can invest in internal systems or switch providers over time
• Portability and integration tooling can reduce practical switching friction

Erosion risks

• Standardized APIs reduce the uniqueness of integration hubs
• Platform disintermediation by new network entrants
• Security and privacy incidents reduce partner willingness to integrate

Leading indicators

• Number of integrated third-party service providers and API usage
• Transaction volumes across closing and recording and network services
• Time-to-close and workflow automation KPIs for customers

Counterarguments

• Partners can integrate with multiple platforms; hub advantage may be contested
• If customers demand modular best-of-breed, central hub value can decline

Erosion risks

• Legal or regulatory changes to mortgage recording practices
• Industry migration to alternative registries and standards
• Operational resiliency requirements increasing costs

Leading indicators

• MERS registration and transfer volumes
• Policy or legal developments affecting mortgage recording
• Customer adoption of alternative registries

Counterarguments

• Registry advantages depend on continued industry acceptance and legal frameworks
• Alternative systems could emerge if policy shifts or cost advantages appear

Erosion risks

• Regulatory change requiring rapid platform updates
• Customers building in-house compliance tooling
• Commoditization of compliance features across vendors

Leading indicators

• Regulatory change velocity and platform update cadence
• Customer audits and compliance outcomes
• Attach rate of compliance modules and retention

Counterarguments

• Compliance features are replicable and may become table stakes
• Customers may prioritize cost and cycle-time over platform compliance tooling