NYSE: No extra fee for routing

By: Ray Pellecchia

File Under: NYSE

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Several readers have asked what NYSE will charge for orders that are routed away to other markets. We just issued the following notice on that subject:

In anticipation of the SEC’s expected approval of the NMS Linkage Plan that will, in effect, replace the existing Intermarket Trading System Plan (“ITS Plan”), effective October 1, 2006, NYSE LLC will implement a new Linkage Order Fee schedule for equities and ETFs for orders routed to other markets through the NMS Linkage. Order routing fees for equities will be set at 2.5 cents per 100 shares consistent with NYSE transaction fees. Order routing fees for Exchange Traded Funds (ETFs) will be set at our current ETF transaction fee of 30.0 cents per 100 shares.

While NYSE LLC routes orders out infrequently, the new fees will enable NYSE LLC to recover a portion of the costs imposed on the NYSE by other markets, enhance our ability to provide low cost order execution, and help maintain a simplified pricing and billing structure for our customers.

The purpose of the new NMS Linkage Plan, like the ITS Plan, is to enable markets to route orders to each other in order to avoid trading through. Trading that takes place over the NMS Linkage System will be performed through the same data processing hardware, software and communications network that comprises the existing ITS System. Unlike the current ITS Plan, under which access to other markets is free, with the implementation of the Linkage Plan, linkage participants will charge each other the transaction fees that are charged to each market’s members.

The new Linkage Order Fees will extend until the scheduled termination of the NMS Linkage Plan on June 30, 2007.

* Linkage Order Fee for Equities–per share: $0.00025. The Linkage Order Fee will be billed monthly, is subject to the cap of $750,000 monthly per firm, but is not subject to the cap of $80 per transaction.

* Linkage Order Fee for ETFs–per share: $0.0030. The Linkage Order Fee will be billed monthly and applies both to ETFs listed on the NYSE and to those traded on the NYSE on a UTP basis. The Linkage Order Fee applies to System Orders under 5,100 shares, is not subject to the cap of $100 per trade for ETFs.

If you need more information, here's the link to the filing with the SEC.

So, rather than pass through the fee charged by the "away" market center, which is typically higher than our fee, we will simply charge the same amount as if the order had executed at NYSE.

Enough serious stuff. On the trivia front, this day in history was one of those bad news/good news scenarios:

Today in NYSE History
29 Sep 1952 Trading hours were extended by a half hour -- 10:00 a.m. to 3:30 p.m., and Saturday trading was dropped.

Tags: [New York Stock Exchange, Hybrid Market, NYSE, NYX