DARK POOL SALVO
ICE’s trading te$t
Jeffrey Sprecher, ICE chief executive, wants to freeze out dark pools.
The owner of the New York Stock Exchange is floating the idea of lowering the price to trade stocks on the Big Board, making it more competitive with the cheaper and less regulated platforms that have been eating into its market share.
Sprecher, chief of NYSE’s parent company, InterContinental Exchange, proposed on Wednesday lowering fees more than 83 percent to trade 100 shares — to 5 cents from 30 cents, according to a memo.
The Wall Street Journal first reported on the dark pools memo.
The proposal, which is reportedly part of a draft memo circulated among Wall Street’s banks and trading firms but not finalized, comes as regulators grapple with different types of complex order types that make certain trades more beneficial for buyers or sellers, depending on where the stocks are traded.
Credit Suisse, which operates the largest dark pool, has agreed to endorse the proposal, the Journal reported.
ICE acquired NYSE in 2013 for $8.2 billion.
The move by NYSE follows its rival Nasdaq, which last month told traders that it would lower fees on some stocks by the same amount.
Fees from exchanges and lightly regulated alternatives trading systems, or dark pools, have caused concern among regulators because of the potential for some forms of market abuse.
The 30 cents per 100 shares is the limit that exchanges can charge, according to an almost 10yearold rule from the Securities and Exchange Commission.
Many dark pools charge brokers lower fees, and some dark pools even pay brokers to make some trades, a process dubbed as “makertaker.”
That practice has driven traffic to the less regulated exchanges, which can command as much as half of current stock volume, according to data from the Financial Industry Regulatory Authority.
Shares for ICE rose 3.1 percent Wednesday, to $221.59.