Commentary

David Weisberger
Traders Magazine Online News

Stop the BS & Promote Real Transparency!

In this shared blog, David Weisberger says a recent WSJ article is wrong and that traders do need to purchase faster and more comprehensive market data to avoid being fined for violating "Best Execution" obligations.

Traders Poll

Is information leakage a major concern of yours when you trade?



Free Site Registration

December 6, 2006

BIDS Taps Mahoney

By Editorial Staff

*A new block trading system expected to launch in the first quarter of 2007 has reached out to the buyside for its first chief executive officer.

Block Interest Discovery Service (BIDS) named Merrill Lynch Asset Management (MLAM) veteran Timothy Mahoney as CEO. Mahoney ran equity trading at MLAM ($536 billion in managed assets) for seven years, overseeing 14 traders.

Mahoney is a frequent speaker at industry conferences. He has been active on numerous New York Stock Exchange and Nasdaq committees. He also spent 16 years working in MLAM's Unit Investment Trust department.

Mahoney is now among a select group of former buyside traders. Of those who have left the buyside, only a handful have gone to run a business unit or lead a company: Peter Jenkins, formerly of Deutsche Asset Management, joined the NYSE to head its institutional client group in 2004; Mike Cormack, formerly of American Century, joined Archipelago in 2000 and within months was named president of the then-fledgling ECN; Rick Holway, formerly of Investment Advisers Inc., started the matching system @Harborside in 1998.

-Michael Scotti

The Commission Skinny

*Median commission rates fell about four-tenths of a penny over the last year, according to Abel Noser Corp., a trade-cost analysis firm. That's roughly one-tenth of a penny every quarter.

For the third quarter of 2006, the median commission rate paid by firms was 3.38 cents a share to trade stocks listed on the New York Stock Exchange and 3.12 cents a share for Nasdaq stocks, Abel Noser reports. The rate for NYSE stocks was down 0.45 cents a share compared to the year-earlier period, when the median rate was 3.83 cents a share. The drop for Nasdaq stocks was slightly smaller than it was on the listed side. The median rate for Nasdaq stocks fell 0.37 cents a share from the third quarter of 2005 to the third quarter of this year. Abel Noser's recent data measured the trading of 133 billion shares, representing $4.28 trillion worth of trades.

-Michael Scotti

NYSE Mulls Fees

*The New York Stock Exchange, in the wake of price changes at sister company NYSE Arca, intends to rethink its own pricing.

According to Bob Airo, an NYSE Group vice president, the exchange will consider changing its policy of charging traders for submitting certain limit orders. Airo was speaking at the Security Traders Association's annual confab in Scottsdale, Ariz.

Any changes would follow a decision to offer customers of NYSE Arca a rebate for providing liquidity in NYSE-listed securities. NYSE Arca now offers a rebate of 20 cents per 100 shares for posted liquidity in NYSE stocks. Liquidity takers pay 30 cents per 100 shares. The NYSE, on the other hand, charges traders for supplying liquidity in certain cases.

"A model that charges for a resting limit order, rather than rebates for it, probably has to be looked at with some serious changes in mind," Airo said. The exec did not go so far as to say the fee of 2.5 cents per 100 shares would be eliminated or that a rebate model would be adopted.

NYSE Group re-jiggered NYSE Arca's pricing for listed trading after seeing its consolidated market share decline significantly over the past year. The group's share of listed trading was 69.3 percent in September, down from 78.5 percent in September 2005.

-Nina Mehta