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The Fight Over ECN Fees

Traders Magazine, June 1998

Howard L. Haykin

A full-blown dispute has emerged between traders and electronic communications networks (ECNs). At issue is the transaction or access fee, charged each time a market maker hits the bid or takes the offer on a stock an ECN is publicly quoting on Nasdaq.

Many market makers complain that these fees should not be charged, in part because ECN orders are similar in one respect to the quotes posted on Nasdaq by market makers. They are all part of the Nasdaq price-quote montage.

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