The SEC unanimously approved a pilot program in December called the Transaction Fee Pilot [sec.gov]. The purpose of this pilot is to test the effect on some of the distorted incentives in our markets on market quality, and includes a bucket of securities where rebates are banned. It’s a one year pilot with the option for the SEC to extend it to a second year. It includes three buckets or Test Groups, including a no-rebate bucket:   The three major stock exchange families that engage in paying rebates had hinted from the outset that they might sue to block (more…)

  IEX published a report this week titled “The Cost of Exchange Services” which is a first-of-its-kind, inside look at how exchanges provide and price market data. Not only does IEX provide a detailed breakdown of market data feeds and physical connectivity costs but they detail the process of how an exchange delivers data.  The numbers are simply astounding.  We urge you to read the entire IEX paper to really understand what the market data fee debate is all about.   After reading the paper, we thought that a good way to understand market data was similar to the seating on an airplane. There is First Class which (more…)

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