SEC hikes fees... The SEC announced that it is more than quadrupling the transaction fees it charges exchanges in response to plunging stock prices. Effective as of April, the SEC will charge $25.70 per $1M in securities sales, up from $5.60. The regulator said the spike is necessary for it to reach its targeted collection amount of $1.02 in FY 2009. John Giesea, president of the Securities Traders Association, said the increase was expected and would not be 'a shock to the system ............................................................................. Time to eliminate the SEC.....PAST TIME !!!!!! This is no different than CEOs getting bonuses for losing $.....
Hmm. 1/(25.70/5.60)=0.2179 *1426.63=310.86 That's 310.86 for the S&P500. Interesting. If the SEC wants to maintain its collection amount, then it means they are expecting the 300 support to hold, at least for FY09. So this is good news, we have a market estimate from the SEC.
Can someone explain to my why this fee hike isn't going to nuke liquidity and volume? MMs and rebate traders already have to exist with razor thin profits per share. Granted this increase is only 1/100th of the size of the proposed trader tax, but id imagine it will have a similar effect on the markets. Though liquidity is usually a function of risk, so id imagine MMs being forced to trade wider spreads to balance the new fee. Which in the end impacts everybody.