A subcommittee of an SEC panel charged with looking at potential reforms in equity market structure is recommending the agency create a pilot program to gauge the effects of cutting stock exchange fees and maker-taker rebates to brokers.
The pilot program would measure the impact of lower access fees on market quality and behavior, according to a memorandum to the Equity Market Structure Advisory Committee posted on the Securities and Exchange Commission’s website. The recommendation came from the committee’s Regulation NMS subcommittee.
The subcommittee proposed that the pilot fees and rebates per 100 shares be capped for separate stock groups at 20 cents, 10 cents and 2 cents. The current cap is 30 cents per 100 shares. Rebates are less than 30 cents per 100 shares.
The program would measure the impact on such things as bid/ask spreads, and order routing and quoting behaviors. It would also gauge the impact of lower fees on the ratio of trading on exchanges vs. over the counter.
“Maker-taker is one of the more debated aspects of current market structure,” the memorandum said.
The SEC committee will discuss the proposal at its meeting Tuesday.