The new owners of the New York Stock Exchange are planning to slash costs for some orders coming from retail investors in a bid to bring more trading back from “dark pools” and other off-exchange venues, according to a rule change filed Tuesday.
The NYSE Group, owned since last year by Atlanta-based Intercontinental Exchange Inc. ICE, -0.54% will waive access fees for midpoint liquidity orders originating from retail investors. Midpoint orders trade at the point between the best bid and offer, giving an investor a slightly better price than what is publicly displayed.
The change could be costly for the NYSE if the initiative takes off. Under the prevailing maker-taker system in the markets, most exchanges make money off trading by paying a rebate to traders willing to place orders on an exchange and charging a slightly higher price to those buying.
By waiving fees for midpoint liquidity orders, NYSE will pay a rebate without charging the other side to buy. The rule change will primarily relate to the way wholesalers, such as KCG Holdings Inc. KCG, +0.43% and Citigroup Inc.’s C, -0.09% Automated Trading Desk, send orders to the NYSE.
The change would encourage more retail orders on the exchange, “enhancing order execution opportunities for all participants, but specifically retail investors,” NYSE’s filing said.
An expanded version of this report appears at WSJ.com.