Competing US equity exchanges attract liquidity by offering rebates to orders that make liquidity and charging fees to orders that take liquidity. This could distort brokers’ incentives against their fiduciary duty. In this Expert Analysis Law360 article, Principal Ilan Guedj and Senior Economist Zhong Zhang, PhD, review the potential increased competition and complexity the new Member Exchange may add to the market. They suggest that regulators and courts will turn their scrutiny to maker-taker fees.
Ilan Guedj, PhD, and Zhong Zhang, PhD
February 14, 2019