Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Asset Managers Back U.S. Plan To Limit Stock Exchange Rebates
Shit. HOW is this legal in the first place??? They got the moola, so they get to make the rules. No ethics. No standards. No conscience. More arcane jargon: "... rebates they pay to market makers for passive orders that add liquidity..." Years ago, I asked a pro trader in his office what it meant, printed right on the sheet we were both looking at: "We make a market in this security." I found out much later, YEARS later--- that it means company X owns 5% of the total number of stock shares in company N.
Does limiting the incentive disincentivize collection of the limit? I would think - only if the "limit" resulted in a set kickback that was independent on the source. (Make all sources equally lucrative to the broker.) Otherwise all a limit does is limit the broker's income, not his misadventure. Musing more, the limit might raise some as well as lower some if it were a set amount so what IS the best way for the broker to be honest and get rich?
Comments