Commentary

Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

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November 1, 2004

NYSE Specialists Will Review Fees Structure

By John A. Byrne

New York Stock Exchange customers could soon have a powerful financial incentive to send more limit orders to the floor. Big Board specialists will consider a scheme that would eliminate some fees. Today, for instance, there is a charge on limit orders which remain on the specialists book after five minutes.

The potential policy change was raised at the Security Traders Association's annual conference. NYSE specialist Sean McCooey of LaBranche & Co., responding to a question, said in his opinion the specialist billing structure should be reviewed. Under certain circumstances, he believed, it would be acceptable to eradicate fees on these unexecuted limit orders.

McCooey, speaking to Traders Magazine, said that NYSE customers should have more incentive. "By charging for limit orders you are not attracting order flow, you are actually pushing it away," he says. However, he said the NYSE might then need to emulate sellsiders likes Merrill Lynch. "Whenever the buyside comes in and says, for example, I want an offer on 250 [thousand shares], they bill them," McCooey says. "We're not set up like that." McCooey added that his ideas are not new. "The NYSE Specialist Association will look at this as we move into the hybrid market," he says.