By Bradley Hope
BATS Global Markets Inc., one of the three big stock exchange
operators, is opposed to a draft proposal by the owner of the New
York Stock Exchangeto reform the U.S. stock market, its CEO said in
an interview.
"Two sides are trying to come to a middle ground that leaves the
investor in the cold," said Joseph Ratterman, CEO of BATS.
The plan being proposed by Intercontinental Exchange Inc., which
bought NYSE Euronext Inc. for $8.2 billion last year, calls for a
compromise between exchanges and Wall Street banks that trade on
behalf of large investors, according to people familiar with the
matter.
Under the proposal, exchanges would cut banks' trading costs to
five cents per 100 shares from 30 cents per 100 shares and the
banks would agree to a rule that would move more trading away from
their so-called dark pools and other off-exchange venues.
Credit Suisse Group AG and Nasdaq OMX Group Inc broadly support
the ICE plan, according to people familiar with the proposal.
Mr. Ratterman said the plan was "highly problematic" and would
"hurt" investors by increasing costs and reducing options for
trading.
"The big problem is they are proposing a one-size-fits-all
approach, but it could have a perverse effect across the market,"
he said.
BATS, based in Lenexa, Kan., favors a "tiered" approach to
exchange fees, charging less for highly traded stocks and more for
less-liquid stocks, he said. The exchange operator is completely
opposed to a "trade-at" rule, which would force more trading onto
exchanges, he said.
NYSE, Nasdaq and BATS each handle about 20% of stock-market
trades.
Write to Bradley Hope at bradley.hope@wsj.com
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