The U.S. securities industry supports the idea of carrying out a pilot program to evaluate the impact of cutting “maker-taker” fees.
Earlier this week, a regulatory committee recommended that the U.S. Securities and Exchange Commission (SEC) carry out a pilot program to test the impact of lower maker-taker fees on market quality and liquidity.
A subcommittee of the Equity Market Structure Advisory Committee (EMSAC) suggested in its report that a pilot study would hopefully help reveal: the relationship among access fees, liquidity provision and market quality; the relationship between access fees, rebates and order-routing practices; and the potential impact of fees on the price discovery process.
In response to the recommendations, the U.S. Securities Industry and Financial Markets Association (SIFMA) issued a statement indicating that it endorses this experiment.
“SIFMA agrees with the basic elements of EMSAC’s subcommittee recommendations. We support centralized regulation of cross-market functions through a single markets regulator, or at the very least [self-regulatory organizations] whose focus is entirely on regulation,” says Randy Snook, executive vice president of business policies and practices with SIFMA, in a statement.
In addition, SIFMA says it supports a pilot on so-called maker-taker trading models that would analyze the effects of reduced fees.
The Canadian Securities Administrators (CSA) recently indicated that it does not intend to go ahead with a planned pilot to examine possible changes to maker-taker models because of the risk that inter-listed trading would migrate to the U.S. as a result.