If the New York Stock Exchange cuts tariffs next year in the wake of new trading rules that are set for implementation, the exchange could have a price war on its hands, The Financial Times reports.
Chris Concannon, head of transaction services at NASDAQ, told the FT that the exchange “is very comfortable with our current pricing position” and that a price war would be “painful” for rival NYSE.
NASDAQ has been readying to gain an advantage as US financial markets prepare for the implementation of Reg NMS, which will require all exchanges to post best prices electronically and for brokers to execute a trade wherever the best price is displayed. NASDAQ has been offering price reductions that seem to many analysts to be an aggressive power play to gain more liquidity electronically before the switch.
The NYSE countered last year with the acquisition of Archipelago, an automated exchange system, and is also working to introduce a hybrid system that aims to combine on-screen dealing systems with traditional floor-based market-making.