Nasdaq plans retail price improvement program for early 2013
By John McCrank | November 7, 2012 9:28 AM EST
Nasdaq OMX Group
Nasdaq said its retail price improvement program would be similar to one launched by Big Board operator NYSE Euronext
Exchanges see the sub-penny programs as a way to win back market share from off-exchange venues.
Nasdaq said in the notice it plans make changes to its proprietary data feeds to reflect the new program in the first quarter of 2013. The plan is subject to regulatory approval.
NYSE's retail program required a limited exemption by the U.S. Securities and Exchange Commission from a rule that bans the sub-penny pricing of stocks on national securities exchanges.
The ban did not apply to non-exchange trading venues, and sub-penny discounts have been widely used by wholesale brokers such as Knight Capital Group
BATS Global Markets, the No. 3 U.S. equities exchange, also announced a retail price improvement program in August.
Wholesalers routinely offer retail price improvement. Their ability to profit on what amounts to regulatory arbitrage has prompted NYSE Chief Executive Duncan Niederauer to speak out on several occasions against what he says is an uneven playing field in U.S. equity markets.
In many cases the discount wholesalers offer on retail orders is just one-hundredth-of-a-cent or less.
If the exchanges are able to execute retail orders at a better price, the wholesalers, which have best execution responsibilities, will have to send more retail orders to the exchanges. The alternative would be for wholesalers to offer better discounts, but that could impact their profitability.
(Reporting By John McCrank; Editing by Tim Dobbyn)
Most Popular Slideshows
- Slow-Moving Yet Unrelenting Hawaii Lava Now Only Inches Away From Pahoa Homes
- 2014 MLB World Series Game 6: Kansas City Royals 10, San Francisco Giants 0 [PHOTOS]
- San Francisco Giants Beat Kansas City Royals, 3-2 In Game 7, Wins 2014 MLB World Series [PHOTOS]
- Cavaliers, LeBron James Flop In First Game Back In Cleveland; New York Knicks, Melo Pull Off Road Upset, 95-90 [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- NATO: Russia's Been Conducting Too Many Military Flights Over Europe
- Moto X 2014 vs. Motorola DROID Turbo - Specifications, Features And Price Showdown
- Dismantling Of Fukushima Reactor 1 Faces Delays, US Judge Gives Sailor Go Signal To Push Through Lawsuit Against TEPCO Over Radiation
- Samsung Galaxy Note Edge To Be Available Through T-Mobile In The US
- Five Extreme Drop Tests On BlackBerry Passport Reveals Its Endurance [Watch Video]
- Updated iOS 8 Pangu Untethered Jailbreak Now Fully Works with Cydia: Key Fixes & Mods to Expect
- Ex-Ohio Trooper Pleads Guilty To Issuing Sex as Penalty To Women Motorists