Exchange brass heading out to Boca Raton for this year's FIA
event could be in for a rough ride from Futures Commission
Merchants (FCMs) increasingly critical of the costs of
An FO Week poll of FCM heads has shown that far and
away the number-one issue on their minds is the level of fees
set by US exchanges. The responses reveal a mounting
frustration with the increasing fee levels, particularly in
light of the growth of electronic trading, which many people
feel should logically bring costs down.
These complaints are nothing new but, as exchanges move to
for-profit status, FCMs are becoming increasingly intolerant of
fee structures that they say are designed more for the benefit
of shareholders than the market.
Amongst the biggest problems is certain of the North
American exchanges and their powers over the setting and
enforcement of trading rules. When the exchanges were mutual
not-for-profit organisations, this compliance function worked
very well, however, as commercial enterprises, their priorities
have shifted to the advancement of the interests of their
shareholders. Where those shareholders are largely independent
traders, some exchanges' compliance departments appear to exist
solely for the protection of that group's interests.
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