Financial News US reports: NYSE Euronext, the world’s largest stock exchange that officially started trading Thursday, has promised users that it will further cut its fees to bring trading costs in Europe in line with much lower levels in the US market.
The move to cut trading fees will raise the stakes in the competition for business between NYSE Euronext and rival exchanges in Europe, and place pressure on exchanges such as the London Stock Exchange and Deutsche Brse to follow suit.
It also represents a pre-emptive strike against pressure from users and the rise of alternative trading venues such as the putative Project Turquoise, set up by a group of investment banks to reduce their trading costs.
Speaking at a lunch in Paris ahead of the formal launch of NYSE Euronext on Wednesday, chief executive John Thain and his deputy Jean-Franois Thodore said they had already reduced trading fees in both the US and Europe, but would continue to cut them further. Euronext already promised a reduction in fees of between 10 percent and 15 percent at the end of last year.
“Trading fees in the US have been under constant downward pressure for many years and there is no question that we will continue to see the same trend in Europe,” Thain said.
He said the average fee per trade on the NYSE was 2.75 cents for every hundred shares traded. An average trade on the NYSE of 500 shares therefore costs 13.75 cents or 10 euro cents in exchange trading fees. This is a fraction of the estimated average of just below €1 per trade in exchange fees charged by Euronext.