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May 31, 2003

Access Fee Changes?

By Gregory Bresiger

It could take months, if not years, before the SEC and regulators respond to complaints that access fees are not assessed fairly.

Dealers are hot under the collar, saying access fees hurt business. Some ECN officials counter that fees are critical for the viability of electronic trading.

Regulators, meanwhile, are considering various options, including the elimination of fees, the reduction of fees, or the inclusion of fees in stock quotes. One New York-area congressman advises industry participants to work it all out.

"They are all big boys," Congressman Vito Fossella (R-NY), told Traders Magazine, during a break at the annual STA Congressional Conference.

Fossella said he supports a balance between lowering fees and keeping market information transparent. He added that he'd welcome an industry wide study of access fees that looked at the various options now on the table. SEC Commissioner Roel Campos told the conference that he personally favors lower or no fees at all.

How about adding fees to the quotes? Not likely. Annette Narazeth, director of the SEC's Market Regulation Division, said this would be very difficult. Incorporating the fee into the quote would produce "more price points" for stocks. And that, she added, would aggravate a liquidity problem, a problem that has been worsening because stocks now trade in dollars and cents rather than fractions.

The bottom line: Trading industry officials say it could be at least another 12 months before overburdened regulators - aware of the access fee issues - move on possible changes. -with John A. Byrne