Commentary

Richard Repetto
Traders Magazine Online News

Why Do Exchanges Own Multiple Licenses? It's Not Hard To See, Look at the SEC

In this recent research note, Sandler O'Neill + Partners, L.P. Principal Richard Repetto examines why the public exchange operators hold multiple licenses and that rationale behind this phenomenon.

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August 31, 2003

Nasdaq Participants Will Get a Break

By Staff Reports

Is imitation the sincerest form of flattery even in over-the-counter trading?

That's what Cincinnati Stock Exchange officials say of a Nasdaq plan, which calls for sharing its revenue sources with market participants. Nasdaq officials said they now intend to "share and compete" with the Cincinnati Stock Exchange. The latter has been, until recently, Nasdaq's bitter rival.

The plan gives all "Nasdaq Quoting Market Participants" a pro-rata percentage of all market participating operating revenue. The latter includes transaction fees, technology fees, and market revenue after the deduction of working capital and operating expenses.

The Cincy has been criticized by Nasdaq officials as not having its same due diligence and regulatory standards. But it has also been undercutting Nasdaq over the past few years, persuading firms to print their Nasdaq trades at the regional Cincinnati exchange.

Cincy officials say Nasdaq's new program is very similar to its own Specialist Operating Revenue (SOR) program. Cincy President David Colker said he is "flattered" by the latest Nasdaq push.