NYSE Group To Eliminate Member Firm Fee Cap on NYSE-listed Equity Trading and Specialist Commissions on Transactions * Eliminating $750,000 monthly fee cap for member organizations; * Establishing flat fee pricing of $0.000275 per share for NYSE-listed securities trading on the NYSE; * Eliminating specialist commissions on transactions; * NYSE implementing revenue sharing program and reducing certain specialist fees; * Changes effective Dec. 1, 2006 pending SEC approval. New York, Nov. 30, 2006ââ¬âNYSE Group, Inc. (NYSE: NYX) today filed with the U.S. Securities and Exchange Commission (SEC) a proposal to change pricing on New York Stock Exchange (NYSE) equities transactions for immediate effectiveness. Subject to SEC approval and beginning Dec. 1, 2006 the NYSE will eliminate the $750,000 monthly transaction fee cap for member organizations and establish a flat fee of $0.000275 per share on NYSE-listed transactions. In conjunction with this filing, the NYSE will eliminate specialist commissions on transactions in their assigned NYSE-listed securities, including exchange traded funds (ETFs), and will implement a transaction revenue sharing program with specialist firms and also reduce specialistsââ¬â¢ fixed costs through the elimination of certain fees[1]. NYSE Arca transaction pricing remains unchanged. The NYSE currently charges a flat fee of $0.00025 per share on equity transactions, subject to a monthly fee cap of $750,000 per member organization. By eliminating the monthly fee cap as proposed in todayââ¬â¢s filing, the effective fee rate will be the same for all member organizations regardless of the amount of volume they send to the NYSE. While the transaction fee is increasing from $0.00025 to $0.000275, the elimination of specialist commissions will generally lead to a lower effective trading cost when compared to the current structure. ââ¬ÅThese changes continue our progress towards improving the value proposition for our customers by simplifying and reducing the all-in cost of trading of NYSE listed securities through the elimination of the specialist commission,ââ¬Â said Nelson Chai, Chief Financial Officer and Executive Vice President. ââ¬ÅAs a result of this filing, specialist firms, which will continue to play an important role at the NYSE, will experience lower fixed costs and participate in a revenue sharing program that will reward them for providing liquidity to our market. ââ¬ÅFor NYSE Group, these changes are designed to be revenue neutral in the near term, will enhance our ability to attract share volume in our listed stocks, and will allow us to capture incremental revenue as volume grows. NYSE believes that the combined effect of these fee changes will make its pricing structure more competitive, efficient and transparent.ââ¬Â
Any order left "on the book" was charged a commission by the specialist firm. If a broker walks in the crowd hits the bid and walks out, there is no spec. commission. It is known on the floor as a "specialist's bill."
The Specialist can charge commission on Limit Order in book after 5 minutes. It's a big one... like 0.005/share. To avoid it... Firms like IB use routing algorithms to shuffle limit orders at 4:50 to an ECN... And then shuffle it back based on various conditions... Like if it's NBBO, etc So my NYSE Limit Orders... Might spend only 80% of the time as a guest of the NYSE (a wild guess). But if it's so easily circumvented... Why not just get rid of it... And raise the other fee by 10%... And tell the lapdog media that it's really, really "revenue neutral". NYX stock is not going through the roof... Because theses guys are good at "revenue neutral". If the Specialist Fees are really gone... Then my Limit Orders can just sit in the NYSE book forever like the old days... And I will do ** more volume ** and make more money... Since today I am missing trades because of the shuffling to ECNs and back. (Sometimes the Specialist will actually wait for 4:50 and my order moved to Island... Then executes at my price one second later).
so the fee for sitting on the book for over 5 minutes has been eliminated? few direct access guys paid that fee anyway as most software programs moved it back and forth before the 5 minute period.
Very informed post, except for the part about being revenue neutral. The specialists firms were charging and keeping the fees, not the NYSE. Unless the specialists are going to receive a piece of the fee increase from the NYSE then I don't see how it is revenue neutral for the NYSE. If the specialists are going to receive a piece of the TC600 increase than that is just a blatant welfare program for the specialists right in the heart of American Capitalism. You can make a very good case that the NYSE is being very greedy here. They took out the caps altogether, which will mean NASDAQ will not be able to offer their mini-caps for going to DOT through Brut. This was a no brainer on the NYSE's part, but then why go and raise the fees on top of that? That is greed. The NYSE is going to take back all the market share that NASDAQ has stolen in listed stocks over the last few years. They should be happy with that. They should even lower the fees because they will be receiving so much more order flow, but no they raise fees instead. Welcome to for profit exchanges.
Can someone confirm that the over 5 minute extra fee is now gone and that there is no need to refresh orders or move them to an ECN? That would be good news.
For a small quant firm like mine... 2,000,000 shares/month... 95% NYSE Listed and 5% AMEX Listed... Where IB "unbundled" rate might be roughly $0.0033/share... (Could be lower, but I have multiple accounts, etc)... This seems like a big positive. If I'm doing the math correctly... Adding $0.000025 is roughly a 1% increase (one percent)... But without SMART having to shuffle my orders around... I'll bet my volume and profits go up 5-10%. I love America... what a great country. If you can't make money on the NYSE paying $0.0033 (one-third of a cent)... Then you are in the wrong business... and should get a job.
Fees going up more Jan 1 2007 for Nasdaq Listed under the unified fee structure: http://tinyurl.com/y8toqx Soon enough the rates will be by feb 1 (Reg NMS Day), IMO everywhere. .002-.0025 add .0027-.003 take .0031-.004 route out
amazing, with volatility dying and volumes rising fees should go down not up. i wonder why we are still paying commissions nevermind fees.