Market operator Nasdaq OMX has reduced the order-to-trade ratio for participants trading on its Danish, Finnish and Swedish markets, making it more costly for participants with a high number of cancelled orders to trade.
Nasdaq OMX Nordic will reduce its order-to-trade ratio to 100:1 from 250:1 on 2 December, so firms that send more than 100 messages on average for a trade will be charged a fee.
The ratio is weighted depending on proximity to the best bid and offer price at the time of order entry and is calculated on a monthly basis for each of the three Nordic exchanges separately.
The original order-to-trade ratio was introduced in July 2011. The fee for orders that exceed the weighted ratio will remain that same at 0.07 Danish krones, 0.09 Swedish krona and 0.01 euro, respectively, across the three exchanges.
“These changes are made to support the aim of Nasdaq OMX Nordic to protect investors and the public interest by introducing measures to improve the equity trading and IPO climate in Sweden, Denmark and Finland,” Lauri Rosendahl, head of equity and derivatives market at Nasdaq OMX Nordic, said.
“The excessive order entry fee is designed to reduce the number of non-actionable orders in the market, thereby promoting greater order interaction and increasing the quality of market data.”