| NEW YORK, June 7
NEW YORK, June 7 The New York Stock Exchange may
cede some of its share in U.S. stocks in an effort to end large
trading incentives after NYSE Euronext's $8.2 billion
sale to IntercontinentalExchange goes through, ICE's
chief executive said on Friday.
Jeff Sprecher has been critical of the practice by U.S.
stock exchanges of giving large rebates on trading fees to
attract order flow, calling the practice "ridiculous" during a
talk at a global exchanges conference sponsored by Sandler
O'Neill & Partners.
"I don't think we should pay for order flow," he said.
"People talk about innovation and all they are really talking
about is price cutting or front-running."
Sprecher admitted that if NYSE did not compete for stock
orders through rebates - which at some exchanges surpass the
fees charged for trading - it would likely lose "a lot of market
share," but that the Big Board should take a leadership position
on improving market structure.
He said it could also ultimately lead to a higher value per
share for NYSE, as the exchange would be focusing on only trades
that make money.
"I want to give the market share where we are losing money
back to the competitors. I will welcome them to take
money-losing business off of our books," he said.
Exchanges have been losing market share to off-exchange
venues where firms can avoid paying exchange fees, such as dark
pools - private trading venues where traders remain anonymous -
and brokerages that match orders internally. Off-exchange venues
have around 40 percent market share, and exchanges have used
rebates and other incentives to try to win back some of that
ICE charges premium prices for premium services and that has
led to a higher share price for the Atlanta-based exchange,
"I've never been one to try to get to the bottom and compete
simply on price. I've tried to compete on technology and
innovation and we continue to do that and it's working pretty
well for us."