The London Stock Exchange (LSE) plans to introduce a pricing promotion for UK equities and securities traded on its International Order Book in a bid to increase liquidity on its market.
From 3 October, member firms will be given the option of selecting one of two fee packages. The first, with a subscription of £50,000 per month, will result in a charge of 0.15 basis points for aggressive executions, i.e. for taking liquidity off the order book. The second package will offer liquidity takers an execution fee of 0.28 bps for a fee of £5,000 per month.
The promotion is scheduled to last until the end of March 2012.
The LSE's standard value traded scheme will remain open to those who do not wish to participate in the new scheme. Under the standard tariff, members are charge 0.45 bps for the first £2.5 billion worth of orders executed, 0.4 bps for the next £2.5 billion, 0.3 bps if a further £5 billion is traded, and 0.2 bps for all subsequent value over £10 billion.
The UK exchange will be hoping the promotion stems the flow of liquidity that has migrated to multilateral trading facilities (MTFs), as its share of FTSE 100 trading continues to decline post-MiFID.
According to Thomson Reuters Equity Market Share Reporter, the LSE has lost around five percentage points in terms of its share of FTSE 100 trading this year, accounting for 44.6% of turnover in August. During this period, Chi-X Europe has gained 4.3 percentage points, while Turquoise, the LSE-owned MTF, increased its share of FTSE 100 trading by 3 percentage points. BATS Europe, whose parent company BATS Global Markets is hoping to finalise a deal to acquire Chi-X Europe by the end of the year, traded 8.1% of UK blue chips in August, compared to 11.1% in January.