The International Securities Exchange last week got some of angry response from retail traders and brokers on a recent amendment to its cancellation fee policy. ISE last month amended the cancellation fee to encourage brokerages to identify retail customers who've made excessive cancellations and pass cancellation fees onto the retail customers (WSL, 5/12). The $1 cancellation fee, instituted last year, is charged for each cancelled order in excess of trade executions because cancellations use up system capacity and slow down trading.

But many active retail traders want the fee and the new fee policy abolished. Retail traders and brokers argue, in comment letters on the recent amendment, that the policy is unfair because cancellations are their only mechanism to change orders in reaction to market events. "There is no way for the trader to modify his order to respond to changes in the marker. The specialist, on the other hand, can just refresh his quotes [without incurring penalties]," wrote Paul Mishkin, a retail broker at thinkorswim. The comment period for the amendment closes at the end of June. An ISE spokeswoman said the exchange is reveiwing the comments and a Securities and Exchange Commission spokesman declined to comment.