London bourse changes tariff model, cuts fees

LONDON, July 1 (Reuters) - The London Stock Exchange Group (LSE.L) announced a new pricing scheme on Wednesday in its latest attempt to improve trading, cutting fees by roughly 9 percent and moving away from a model applied by rivals.

The LSE said the new tariff would have resulted in 3 million pounds ($4.93 million) worth of trading fee reductions between January and March, representing about 9 percent of total trading fees in the corresponding period.

"The structure announced today will offer new incentives from which a broader range of firms can benefit, and should help to encourage a return to the long-term trend of volume growth on our markets," said Chief Executive Xavier Rolet.

The new tariff scheme moves away from a so-called "maker-taker" model to balance charges to each side of a transaction.

The maker-taker model, which charges higher fees for clients going through the order book to take positions offered, was introduced Sept. 1 as the exchange attempted to retain its market share by following the same tariff model of the new entrants and cut fees by about 7 percent.

Its market share for FTSE 100 stocks, however, continued to fall and dipped below 70 percent on May 6 for the first time.

Under the new scheme to be introduced from September 1, the LSE will charge 0.2 basis points for each sides of a trade, making it the lowest in terms of fees for a passive order.

New entrants such as Chi-X, Nasdaq OMX Europe (NDAQ.O) and BATs currently charge 0.3 basis points, by comparison, while Turquoise charges 0.28 basis points.

The LSE expects most of its top clients to benefit from this simpler tariff scheme immediately after the introduction.

The revised scheme also introduces new incentives for trading in small cap stocks. (Reporting by Daisy Ku; Editing by David Cowell)