BATS TRADING SAYS NYSE REBATE AND FEE CHANGES BENEFIT HIGH VOLUME USERS AT EXPENSE OF SMALL ONES

Posted April 23, 2008

NEW YORK – NYSE Arca, the electronic trading venue unit of NYSE Euronext, announced higher rebates and fee cuts for its heaviest users who trade multi-million numbers of average daily share volume – measures that a small, independent competing trading venue says reward large users at the expense of small ones.

NYSE Arca customers with Mid-Point Passive Liquidity (MPL) orders with a monthly average daily share volume above 30 million will get a rebate of $0.0015 per share, higher than the $0.0010 per share rebate being extended to all other MPL customers. Customers with more than 40 million average daily share volume will get a reduced take fee of $0.0029 per share. In addition, NYSE Arca is waiving its rebate cap of 100 million average daily share volume for NYSE-listed securities and 75 million for Nasdaq-listed securities.

“If you happen to be one of the few Arca customers that hit the minimum 60 million shares per day volume tier, then you may see a small savings going forward,” says Joe Ratterman, President and Chief Executive Officer of BATS Trading Inc. “The reduction in access fees for top tier customers amounts to a minor savings of 0.00005 per share traded, or a ½ mil.”

Ratterman’s assessment of NYSE Arca’s new fees and rebates is that access fees will increase for most customers, from 25 mils to 26 mils for Tape C. “A vast majority of Arca customers will start paying more to access the Arca market so that a handful of Arca’s customers can start paying less,” he says. “With less than 24 hours notice, many of their customers are likely scrambling to update their routing tables based on the sudden increase in prices.”

The liquidity rebates apply only to the first 100 million for Tape A and the first 75 million for Tape C, adds Ratterman, whose BATS Trading emphasizes a $0.0025 per share fee for all securities traded. “After you pass through the upper volume limit(s), your liquidity rebates are actually reduced,” he says.

NYSE’s new pricing will take effect May 1, following on price changes made April 1 for Nasdaq-listed (Tape C) securities. “The new NYSE Arca pricing provides even more benefits to high volume customers, and the MPL order type is a useful alternative to dark pools,” says Lawrence Leibowitz, Group Executive Vice President, US Execution and Global Technology, NYSE Euronext. “In addition to anonymity and price improvement, MPLs offer better fill rates due to unique order interaction on one of the largest exchange liquidity pools. Coupled with attractive rebates, this provides significant advantages over dark pools.”