| Jerry Putnam |
ArcaEx, the electronic exchange of Archipelago Holdings, may revamp its pricing for listed securities once its merger with the New York Stock Exchange closes. The move comes on the heels of new aggressive pricing at rival Nasdaq Stock Market.
Arca will review its competitive position after it becomes part of NYSE Group, Arca CEO Jerry Putnam said in a conference call last week. “The Hart-Scott [-Rodino] period [of the merger] prevented us from having any discussions whatsoever on that, so we’ll get a lot more engaged with New York on the pricing topic once we have the deal closed,” he said.
Arca will initially function as a separate exchange and there are no requirements to harmonize pricing with NYSE; the Big Board currently has no plans to lower pricing, Putnam added. The merger is expected to close by the end of the month.
If Arca lowers its pricing, it could become a low-cost venue for executing NYSE securities and defend NYSE’s market share against aggressive competitors. Nasdaq currently charges $0.0007 for trading listed liquidity and rebates $0.0005 to firms who add liquidity for NYSE-listed stocks, such as market makers. Archipelago charges $0.0010 for taking liquidity, and rebates nothing. Nasdaq’s aggressive pricing is expected to help Nasdaq siphon liquidity off the floor (WSL, 12/2).