08.21.2017

Rolet Debates Exchange Rebates

08.21.2017
Shanny Basar

Xavier Rolet, chief executive of the London Stock Exchange Group, entered into a Twitter debate on exchange rebates following news that Massachusetts is reviewing whether they are in the best interest of investors.

Last week Massachusetts’ securities regulator announced an inquiry into whether retail brokerages are routing orders to stock exchanges in return for payments instead of best execution. William Galvin, the secretary of the Commonwealth of Massachusetts, said in a statement: “If financial rebates or kickbacks create a conflict that results in less than the best deal for the investors, this practice must stop.”

Rolet responded to the announcement of the probe:

A “maker-taker” model involves an exchange charging  clients who take liquidity, but offers payments – or rebates – to brokers who make prices and facilitate liquidity. He clarified that Turquoise, the multi-lateral trading facility owned by the London Stock Exchange, uses a maker-taker model as it is not a regulated exchange.

Jim Greco, founder of alternative trading system Direct Match, replied and exchanged a series of tweets with Rolet:

The debate ended cordially:

 

 

Related articles

  1. Deutsche Borse-LSE Merger in Focus

    Archax is the UK’s first regulated digital securities exchange.

  2. Investors can take into account firms' impact on nature in addition to traditional ESG metrics,

  3. The fund manager recently announced connectivity between Coinbase and the Aladdin platform.

  4. New Emir Reporting Requirements Kick In

    MFA says proposal will impair managers' ability to deliver for investors.

  5. Jacobi Asset Management has hired an ex-BlackRock executive as its new CEO.