Proposals by the NASDAQ and NYSE to allow ETF issuers to pay market-makers have been receiving strong reactions from industry players.
James Armstrong of Traders Magazine reports
that the ICI has been vocal in support of the measures, but Vanguard
have ranged from tepid to cool on the proposals, arguing for a longer review period and greater assurances that these changes don't distort the market.
Vanguard's Gus Sauter
said of that the NYSE's proposal should not be approved "until Arca articulates and provides support for the purported benefits to the market and long-term investors that the program will provide."
In a joint letter to the SEC, BlackRock managing directors Joseph Cavatoni
and Joanne Medero
wrote, "The exchanges' respective proposals and plans offer the opportunity for new and smaller ETPs to gain traction in the marketplace at an earlier time. The exchanges should be allowed and encouraged to experiment and innovate unique programs."
On the other side, Ari Burstein
, ICI's general counsel, wrote in a letter to regulators, "As ETF sponsors, ICI members have a strong interest in ensuring that the securities markets are highly competitive, transparent and efficient. Liquid markets are critical for ETFs, particularly smaller and less frequently traded ETFs."
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