Bloomberg News

LSE Changes Tariffs for High-Frequency Traders to Boost Volumes

April 21, 2010

London Stock Exchange Group Plc (LSE) will change the fees it charges some clients as Europe’s oldest independent bourse seeks to lure business from high-frequency traders.

The exchange will test a new tariff system in the three months starting May 4, “to incentivize users who generate the most liquidity on the order book and who operate liquidity provision models on the FTSE 350,” London-based LSE said in an e-mailed statement.

The changes for “aggressive trades,” such as high- frequency trades, are “designed to encourage tighter spreads, greater depth of liquidity and improved execution likelihood on the order book, to the benefit of all participants,” the statement said.

LSE, along with other traditional exchanges such as Deutsche Boerse AG (DB1) and NYSE Euronext (NYX:US), has been losing market share to so-called multilateral trading facilities including Chi-X Europe Ltd. and Bats Europe. LSE’s share of FTSE 100 Index stock transaction fell below 50 percent for the first time in intraday trading last month, according to data from Bats Global Markets.

In response, Chief Executive Officer Xavier Rolet, who started in May last year, is attempting to stem the losses by moving the exchange onto a new trading system, changing LSE’s fees and looking to diversify into new markets.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net.

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net.


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