Nasdaq chief defends maker-taker, but suggests fees too high


"The maker fee is an incentive ... for people to provide liquidity into the market," says Nasdaq OMX (NASDAQ:NDAQ) CEO Robert Greifeld, speaking on the sidelines of a congressional-sponsored roundtable about equity market reforms. "To be rewarded for that in some way I think is fair and legitimate."

However, he says, the $0.30 fee "was  not designed by God," and notes it's been at that level for 10 years.

The so-called "maker-taker" model is receiving heightened scrutiny following the Michael Lewis book which questioned the practice of paying brokers an an incentive to boost liquidity, and the major exchanges are competing with market-makers like KCG Holdings for order flow, perhaps enticing brokers to send orders to where they get paid the most, instead of where their customers get the best execution.

ICE CEO Jeffrey Sprecher also advocated lower fees, but goes further in suggesting a ban on maker-taker pricing altogether.

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Comments (2)
  • ReligiousWacko
    , contributor
    Comments (1826) | Send Message
     
    A very small transaction tax would help INVESTORS.
    28 Jul 2014, 03:07 PM Reply Like
  • rambler1
    , contributor
    Comments (977) | Send Message
     
    Put back spreads, and that will provide liquidity & incentive to assume risk and better trading conditions.
    28 Jul 2014, 03:45 PM Reply Like
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