Are HFT firms subjected to tax and clearing fees?

Discussion in 'Order Execution' started by losemind, Jul 18, 2011.

  1. losemind


    What are the costs of an HFT firm trading on NYSE?
    Do they pay clearing fees?
    Are they subjected to income tax and dividend tax?
  2. lionline


    no, when you become an HFT firm on NYSE you get special HFT Exempt Status.

    This one is a step higher then the NYSE specialist.

    NYSE pays you for every share traded, so do the clearing firms.

    SEC provides a rebate of 1/2 of the SEC fees that it collects from other firms that are contra's to your trade.

    The IRS also provides a 40% rebate back on the dividend tax it collects from the issuers that the HFT has traded.

    Clearing firms pay an HFT firm a "pre-clearing fee" Basically, the new NYSE rule requires all clearing firms to "pre-clear" with HFTs.
  3. losemind


    So how does one qualify for "HFT Exempt Status"?
  4. First you have to go on a snipe hunt.
  5. lionline


    ...and finding it - is the first challenge.
  6. losemind


    What do you guys mean?
  7. lionline


    you first need to find a Verbal Agreement Form for HFT on NYSE. I suggest calling them directly, as navigating the NYSE site is a bit cumbersome. Fill it out, sign it and submit to them.