Nasdaq OMX Group Inc. is studying the effects of lower market access fees, with the launch of an experiment designed to assess the impact on various elements of market structure.
Nasdaq said Monday it is experimenting with lower access fees for 14 stocks, representing both small and large cap companies. It is cutting the access fee for those stocks to 5¢ per 100 shares from 30¢ per 100 shares, and reducing the rebates for providing liquidity too.
The exchange is expecting the experiment to generate valuable data about the impact of access fees on a variety of market metrics, such as the level of off-exchange trading, price discovery, trading costs, displayed liquidity and execution quality.
The experiment will last for at least four months, and Nasdaq says that its economic and statistical research group will publicly post the results of the program.
“We have a bias to action and finding solutions based on empirical evidence,” said Tom Wittman, head of global equities and executive vice president of global trading and market services at Nasdaq.
“Today we move forward proactively with our experimental pricing program to see how lowered access fees affects the quality of the markets for investors and public companies,” he added.