Alpha Group is launching a new trading mechanism with a fee structure that the company says will reduce back-office processing costs for retail brokers and dealers.

On Friday, Alpha Group announced the fee structure for the new Alpha IntraSpread facility, which it expects to launch in the fourth quarter of this year, subject to regulatory approval.

The IntraSpread facility allows dealers to seek matches within their firm without pre-trade transparency and with guaranteed price improvement upon the National Best Bid and Offer at the moment of the trade.

For trades taking place in the Alpha IntraSpread facility, Alpha will charge its fees on a net basis. There will be no fee determined by Alpha for the active side of the trade, nor a rebate for the passive side of the trade. For securities with a price less than $1, the net fee will be 1 mils ($0.0001) per share traded; and for securities with a price greater than or equal to $1, the net fee will be 2 mils ($0.0002) per share traded.

Based on an expected launch during the month of November 2010, Alpha said it will apply a fee holiday on the IntraSpread facility until March 1st, 2011.

“The IntraSpread facility will bring the industry to a whole new level of savings on trading fees and, anticipating larger fills within this facility, it will also significantly reduce back-office processing costs,” said Jos Schmitt, CEO of Alpha Group. “It will be particularly beneficial to the retail brokers, as well as the small- and medium size dealers – the ones who are today impacted the most by market structure changes.

“Furthermore, when trading in the IntraSpread facility, dealers can guarantee their clients a price improvement versus the National Best Bid and Offer for each immediately tradable order,” Schmitt added. “Buy-side and Liquidity Providers will have a new pool of liquidity they can access.”

IE