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Rob Daly
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Is it unfair to lay the blame of the worst market-structure characteristic at the feet of high-frequency traders?

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January 1, 2003

ECNs Locked In Rebate Row

By Gregory Bresiger

Instinet and Island are encouraging participants to lock markets, according to Nasdaq. "We have empirical evidence that this is happening," a senior Nasdaq official, who didn't want to be quoted by name, told Traders Magazine. "And this means that investors aren't getting the best price discovery," he added.

The Nasdaq official said that previously Island and Instinet rejected bids that would have locked markets, but today they no longer do that.

The ECNs have reversed course to generate liquidity rebates for its customers, according to Nasdaq President Richard Ketchum.