02.18.19
Big Three Stock Exchanges Sue SEC Over Trading-Fee Plan
by: Dave Michaels; Alexander Osipovich
NASDAQ and Cboe Global Markets on Friday filed suit against the SEC to halt implementation of the Transaction Fee Pilot, a day after the New York Stock Exchange filed a similar challenge. The pilot has riled big exchange operators because it would undermine the “maker taker” model, in which exchanges pay rebates for some orders, while charging fees for others. Critics of the model say it encourages brokers to send their clients' orders to the exchange that pays the biggest rebate, rather than the one that gives clients the best result. The pilot, which could last up to two years, would slash the fees that exchanges can charge for trades in hundreds of stocks—effectively forcing them to cut rebates for those stocks too. Other stocks would be untouched. The SEC would monitor trading activity to see how the experiment played out.
Read the full article on Wall Street Journal