The London Stock Exchange (LSE) has made changes to its new fee schedule, due to be implemented on 1 September, in response to feedback from customers and a review of its order management surcharges.
The exchange has dropped plans to impose a 0.25 basis point surcharge for users executing more than 70% of their orders on the exchange aggressively.
The LSE has also reduced the instances where its £0.05 order management surcharge, levied when events such as order entries, modifications or deletions exceed a certain volume, will apply. The surcharge will now only apply where order events in FTSE 100 and FTSE 250 securities exceed 100 per electronic trade, or where order events for exchange-traded funds and exchange-traded products exceed 200 per electronic trade. No other securities will be subject to the surcharge.
The change follows analysis and revision of a pilot scheme introduced in December 2008.
In addition, the exchange has clarified how its SETS Internaliser charge is applied and how executed orders count towards a firm’s monthly cumulative value traded.
The LSE’s new fee schedule, first unveiled on 1 July, will see the abolition of its maker rebate, introduced last September, in favour of levying an equal charge for both passive and aggressive orders. LSE CEO Xavier Rolet argues that maker rebates place a higher value on passive orders, but the exchange values both passive and aggressive orders equally.
The new tariff structure will also deepen volume discounts and made them easier to hit. Under the new tariff, members will need to trade more than £10 billion in value per month on the LSE to achieve the lowest fee of 0.20 bps, while under the current schedule, companies need to trade more than £30 billion a month to hit the lowest fee of 0.45 bps.