BATS filed with the Securities and Exchange Commission today to launch its own Retail Price Improvement (RPI) program on the BATS BYX Exchange.
The filing today and program are a response to NYSE’s recent installment of its own price program, the Retail Liquidity Program (RLP.) NYSE’s RLP program was launched on Aug. 1.
"Our plan, which is subject to approval by the SEC, is designed to provide material price improvement for retail orders sent to BYX," BATS said in a release.
According to BATS, its RLP offering is distinct from NYSE’s program in several ways.
First. BATS will allow retail orders to execute against price improving liquidity that is not an RPI order in strict price/time priority. Second, BATS will allow retail orders to execute at more than one price so that the retail order realizes the maximum price improvement RPI orders are willing to offer.
Also, BATS will not favor certain members who enter RPI orders over other members. All firms entering RPI orders will be subject to the same fees.
Lastly, BATS will support RPI in all National Market System securities priced at one dollar or above on a single exchange – BYX.
The NYSE and sister exchange NYSE MKT first submitted their proposals for a "Retail Liquidity Program" to the SEC in October 2011.
Nasdaq OMX has also submitted its own retail liquidity plan, dubbed the "Retail Investor Auction." Nasdaq announced its auction proposal in May during its annual Investor Day. The idea behind RIA was to offer price improvement on retail orders by pitting market makers against each other in special auctions, similar to the NYSE plan.
