LSE slashes UKtrading fees
The London Stock Exchange (LSE) is set to introduce a new fee structure for its UK order books as it ups the ante in an increasingly aggressively-priced market.
From 1 December, sellers of stocks will be hit by a flat charge of 10p per executed order, rather than the multiple 10p charges they currently pay for every buyer that takes a portion.
The old tariff meant that a client had no way of knowing how much it would cost them to sell a block of shares, as it was dependent on how many trades it took to clear the lot.
LSE hopes the move, which will cost it £1.5m in trading revenues, will make trading on its platform cheaper, and its fees more predictable for clients.
Also from December, the exchange will allow traders to place “hidden orders” on its system, ensuring that large orders do not cause the market to move against them.
Hidden orders are bulk orders – for example of 25,000 in one stock – which are only revealed to the market in increments, as they are matched. The system is similar to “dark pool”, systems that aim to reduce market impact of trades by withholding some details.
The exchange has delayed the start of testing for its dark pool, Baikal, as it continues talks over the acquisition of rival platform Turquoise. Baikal was due to start trading later this year, but a deal with Turquoise could lead to synergies with its own dark pool.
The LSE, under chief executive Xavier Rolet, is battling to retain market share as cheaper, more technologically advanced entrants snap at its heels.
Its share has come down to less than 60 per cent, from 82 per cent at the beginning of the year, as platforms such as Chi-X and Turquoise have grown their positions.