Direct Edge delays message fees, hunts institutional flow
stock exchange Direct Edge has delayed the introduction of its order-to-trade
message tariff and has also revealed details of a new scheme designed to
attract more institutional liquidity.
bourse has decided to delay today’s launch of its Message Efficiency Incentive
Program (MEIP) for its two US equity platforms – EDGX and EDGA – by one month.
Edge said the delay was to allow for member readiness and to coordinate its
scheme with fellow US bourse Nasdaq OMX, which plans to use a similar approach
to the IntercontinentalExchange for its messaging tariff by weighting charges
based on the proximity of messages to
the national best bid and offer.
Edge’s MEIP will reduce the rebates
members receive if their message-to-trade ratio is above 100:1 by US$0.0001 per
share. Registered market makers that meet certain other requirements will be
exempted from the scheme.
Hunting big flow
trading notice published yesterday, the US bourse provided details of its
investor tier class, which it says is designed to provide incentives for
liquidity providers that “contribute to price discovery with more static
quotes”. Investor tier members will receive a rebate of US$0.003 per share,
higher than the US$0.0023 per share in place currently.
qualify for the scheme, members must post over eight million shares on EDGX on
a monthly basis, maintain an added-to-removed liquidity ratio of at least 70%
and have a message-to-trade ratio of under 6:1.
want to attract more institutional liquidity onto Direct Edge and the investor
tier is a way for us to provide value to our members in this space with a
pricing tier that will help to encourage this kind of flow,” Bryan Christian,
head of sales at Direct Edge, told theTRADEnews.com.
Direct Edge has also reduced routing fees for its midpoint routing strategy on
EDGA and introduced a new tier for those that use the service.
today, the new routing fee will be reduced to US$0.0012 per share from
The new tier will be available
for firms that execute more than two million shares in average daily volume using
the midpoint routing strategy. Those firms will have a reduced rate of
US$0.0008 to remove liquidity and can add liquidity for free, instead of being