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Nasdaq names 14 stocks to test lower fee and rebate programme

Reuters

(Reuters) - Nasdaq OMX Group (NDAQ.O) on Monday named 14 stocks that will take part in the exchange operator's programme to test the effects of lowering its exchange fees and rebates, beginning on Feb. 2 and lasting at least four months.

The amended pricing programme could help address concerns that high exchange fees and rebates cause distortions in the market as traders seek to avoid the fees and collect the rebates.

The fee for orders to immediately buy any of the stocks in the programme through Nasdaq will drop to 5 cents per 100 shares, from 30 cents per 100 shares, Nasdaq said in a note to traders.

Rebates on those stocks for resting orders sent to the exchange will fall to 2 cents per 100 shares, 4 cents per 100 shares, or in some cases be dropped all together, depending on the type of order. Rebates are currently similar in size to exchange fees.

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Exchanges have been losing market share to broker-run alternative trading systems, including "dark pools," partly as brokers seek to avoid high exchange fees.

Nearly 40 percent of all U.S. stock trades, including almost all retail orders that go through online brokerages, now happen away from exchanges, up from around 16 percent six years ago.

There are seven Nasdaq-listed stocks and seven New York Stock Exchange-listed stocks in the amended-pricing programme.

The Nasdaq-listed stocks are American Airlines (AAL.O), Avanir Pharmaceuticals Inc (AVNR.O), FireEye Inc (FEYE.O), GoPro Inc (GPRO.O), Groupon Inc (GRPN.O), Sirius XM Holdings Inc (SIRI.O), and Zynga Inc (ZNGA.O).

The NYSE-listed stocks are Bank of America Corp (BAC.N), General Electric Co (GE.N), Kinder Morgan Inc (KMI.N), Rite Aid Corp (RAD.N), Transocean Ltd (RIG.N), Sprint Corp (S.N), and Twitter Inc (TWTR.N).

Nasdaq said it would periodically make statistics available on how the stocks in the programme trade on its exchange, including data on market share, displayed liquidity, effective spreads, and volatility.

The shares also trade on other exchanges, such as BATS Global Markets and Intercontinental Exchange's (ICE.N) NYSE unit, which are not part of the Nasdaq initiative.

(Reporting by John McCrank in New York; Editing by Bernadette Baum)