Fees spat between market makers and brokers brings long-standing issues to the fore
A row has broken out between brokers and option market
makers on Euronext Liffe over brokerage fees.
Although few people are prepared to speak openly, sources
say the dispute erupted when one market maker declared in the
middle of January that it was no longer prepared to pay
brokerage on each leg of option strategies.
Other market makers have since followed suit, prompting
emotive talk among the broking community of a cartel.
A group of around 15 brokers met in a London bar on Tuesday
night to discuss the issue. Sources suggest that one of them
has offered to establish its own market making operation,
perhaps driving an even bigger wedge between the two sides.
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