The London Stock Exchange (LSE) will extend two pricing promotions designed to attract liquidity in FTSE 350 stocks and incentivise high-volume trading participants following positive feedback from members.
The high-volume liquidity taker promotion, which has now been extended until September 2011, charges traders 0.29 basis points for aggressive executions during continuous trading in equities and international order book securities. The promotion excludes exchange-traded funds, commodities and products, covered warrants and retail bonds. To qualify, a firm must have executed more than Â£3 billion aggressively in continuous trading in equities or IOB (International Order Book) securities during a month.
The exchange's liquidity provider scheme for FTSE 350 stocks will now run until 31 March 2012. The scheme waives fees for members that provide liquidity in the FTSE 350 index.
To qualify for free trading in a given calendar month, passive continuous trading execution by value must exceed 75% of all continuous execution by value in FTSE 350 securities.
Member firms can also specify a group of user IDs – i.e. clients of member firms that access the exchange via sponsored access arrangements – to be included separately within the liquidity provider scheme. Members of the exchange will be charged a fixed monthly fee of Â£2,500 for each end-client they nominate. Any passive flow submitted by these groups must be solely generated from the firm's own capital with no client related orders.
According to an LSE spokesperson, the pricing tariff is likely to be in place for some time given the positive feedback to the two schemes since they launched in April 2010.
Under the LSE's standard fee schedule, members are charged an equal fee for both passive and aggressive executions. Traders are charged 0.45 bps for the first Â£2.5 billion traded per month, 0.40 bps for the next Â£2.5 billion, 0.30 bps for the next Â£5 billion and 0.20 bps for all subsequent value traded.