MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Tuesday, January 15, 2013 The War Against ETF Market Makers Claims NYSE as Latest Casualty And another one bites the dust. The exchange operator NYSE Euronext has withdrawn its proposal with the SEC to launch a program that would have sponsors pay incentives to trading firms for becoming ETF market makers. The pilot program, according to an SEC filing, would have been dubbed the Lead Market Maker Issuer Incentive Program and would have allowed ETF sponsors to pay an Optional Incentive Fee, which would range from $10,000 to $40,000 per year, for serving as a lead market maker for a prescribed number of ETFS on the NYSE Arca. This incentive would be above the current fees already associated with ETF listings on Arca. For example, the SEC filing indicated that the issuer of an ETP is required to pay a listing fee that ranges from $5,000 to $45,000. ETP issuers also pay a graduated annual fee based on the number of shares of the ETP that are outstanding. The annual fee ranges from $5,000 to $55,000, according to the filing. The NYSE justified the proposal by arguing that market makers assume a variety of risks, including position risk in times of low trading volume. The exchange operator wasn’t the only one to propose such a program. Nasdaq also also sought to launch its own program. Under the Nasdaq proposal ETF spnsors would have paid incentive fees between $50,000 and $100,000 per year. To be sure, these proposals gained enemies, with the ICI and Vanguard voicing stern opposition to the proposal. As a result, NYSE amended its proposal twice and then finally withdrew its proposal mere days before the SEC was to decide on final approval. Nasdaq withdrew its plan last month. Printed from: MFWire.com/story.asp?s=42694 Copyright 2013, InvestmentWires, Inc. All Rights Reserved |