Pan-European multilateral trading facility Nasdaq OMX Europe will introduce a new rebate from 1 May to help members mitigate the rising fixed trading costs associated with smaller trade sizes.
Nasdaq OMX Europe will rebate an extra €0.02 per trade, whether passive or aggressive, for trades resulting from orders of at least €4,000. The rebate is independent of the MTF’s existing maker-taker pricing structure.
According to Nasdaq OMX Europe, the rebate represents a 40% discount on the fees members pay to European Multilateral Clearing Facility, the central counterparty (CCP) service provider for the MTF.
“In the past three to six months, average trade sizes have reduced considerably across all trading venues, including incumbent exchanges,” Todd Golub, vice president, Nasdaq OMX Europe, told theTRADEnews.com. “The splitting up of trades has led to an increase in the fixed costs of trading, notably clearing and settling, and our new hybrid model will help to balance out these extra costs.”
Golub also noted that Nasdaq OMX Europe and other market participants are in discussions with EMCF about other ways to reduce clearing and settlement costs and cater for the new trading environment.
“As cost pressures take hold of the market, you need to make sure your pricing model is fluid and can adapt with the times,” said Golub. “We expect further developments from EMCF and other CCPs, but our extra rebate will ensure we have the most competitive pricing in Europe.”
The start of May will also signal the end of the MTF’s pricing promotion, which had a flat maker rebate and taker charge of 0.25bps. Pricing will revert back to pre-promotion levels, with a 0.20bps rebate for adding liquidity and a 0.30bps charge for removing liquidity.