Former Lehman Bros capo Richard Fuld likes acronyms, and somewhat out of character for the Big Dick many on Wall Street remember him to be, he also apparently likes the idea of inserting himself into a consortium that has created yet another new exchange platform–that eschews the notion of maker-taker for being ‘bad policy’ and leading to the subtitle of this story: “NSX Takes On IEX; No Rebates Allowed”
So, MarketsMuse curators ask our readers to pardon the misleading lead-in title; the latest entrant to the world of equities exchanges isn’t really new, in fact its legacy extends back 130 years. Yep, MarketsMuse curators from the fintech department came across this ‘Back to The Future’ story courtesy of coverage from WSJ’s Bradley Hope, our favorite “Clark Kent of Market Regulation and Trading Technology.”
One of the country’s oldest stock exchanges is planning a comeback next month.
The National Stock Exchange, originally founded as the Cincinnati Stock Exchange in 1885, has submitted a final rule filing with the Securities and Exchange Commission and could restart trading as early as December.
The revival of the 130-year-old exchange as NSX will bring the number of U.S. stock exchanges to 12 at a time when many critics of the market structure say there are too many trading venues. IEX Group Inc., an upstart that has positioned itself as a haven against predatory trading, also has applied to become an exchange, but that isn’t expected to be approved before 2016.
The new owners of NSX say they will introduce some novel features, starting with abolishing the prevalent “maker-taker” pricing system where firms that post orders on an exchange get a rebate of 20 to 30 cents per 100 shares traded and those that take the order are charged about the same amount.
NSX will only charge firms if they take a resting order and the cost will be just three cents per 100 shares, a cost of as much as 90% less than on other markets.
“We’ve heard a lot about issues with the market structure and agree with some of the criticisms,” said Mark Sulavka, chairman and CEO of National Stock Exchange Inc. “But we want to actually make changes, not just talk about them.”
Mr. Sulavka is being advised by a range of exchange veterans and bankers including Dick Fuld–that’s right, the same guy who was CEO of Lehman Brothers Holdings Inc., who helped arrange the buyout of NSX by a new consortium.
Other advisors include Bill Karsh, the former CEO of Direct Edge and Kevin O’Hara, a former co-general counsel of the New York Stock Exchange. Louis Pastina, who oversaw NYSE’s trading floor until 2014, is chairman of NSX’s regulatory oversight committee.
Even if it “traded ahead”, those who missed it can find the full story from WSJ by clicking here