Amex Reinstates Revenue Sharing For ETFs
The Securities and Exchange Commission last week let the American Stock Exchange reinstate a revenue sharing program designed to encourage ETF traders and market makers to quote aggressively. The program was supposed to be extended at the end of December but had inadvertently been allowed to lapse, officials said. It is now being extended until December. The exchange pays ETF specialists $0.0024 per share whenever a specialist buys or sells ETFs and ends up being a liquidity provider in that transaction. If the specialist is not a liquidity provider on the transaction, he will only retain $0.0004 per share. Registered traders will receive $0.0010 per share and designated Amex remote traders will receive $0.0015 per share when they end up being liquidity providers. Amex will cap payments at 43,478 shares executed because the exchange caps customer transaction fees. Several traders said the program will prop up Amex’ ETF business as the exchange transitions to its merger with NYSE Group.
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