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Despite the view that MiFID II is a European regulation, US investment managers are experiencing disruption as they align their research payment and execution practices with the influential standard.

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June 30, 2002

Latest Battle Keeps Access Fees in Place

By Gregory Bresiger

Access fees, branded by many market makers as "unfair," are intact following the settlement of the bulk of an ECN arbitration, attorneys for both sides told Traders Magazine.

NexTrade, a Clearwater, Fla. ECN, was dunning some two dozen firms, including Lehman Brothers and Crowell, Weedon & Co., for unpaid access fees, according to some dealers. None of the parties involved would speak for the record, citing the confidentiality requirements of the arbitration hearing.

Nevertheless, each side was trying to put a spin on the settlement, although they all agreed that access fees remain.

"Just about all the parties have settled, with NexTrade receiving some part of what they were seeking," said an attorney for one of the respondents. "However, even though we paid some money to them, I certainly wouldn't call it a victory for NexTrade." But officials on the other side emphasized that, "the principle of the access fee is intact."

Still, attorneys on both sides agreed that continuing the arbitration would have been futile.

"It was costing a lot of money to continue this. Attorneys fees are huge. And ultimately we believe the SEC, not an arbitrator, is going to be the one to settle this," according to an attorney. He added that, even if the arbitrator decided for one side, the decision would not be binding on the entire industry.

STA officials, who recently met with the SEC, are lobbying to have the fees reduced, eliminated or extend the power of levying the fees to their members.