Pensions & Investments: Maker-Taker Rebates Now Likely to be Put Under Scrutiny by SEC

By Jen Fagenson

November 27, 2017

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The Securities and Exchange Commission’s pilot program to measure the effects of maker-taker rebates on equity trade execution is now a possibility as the year draws to a close writes Rick Baert of Pensions & Investments.

Said Peter Maragos, CEO at Dash Financial Technologies, a New York-based trading technology and analytics provider: “I don’t agree that there’s an anti-rebate sentiment. There’s a lot of rhetoric against rebates, but there’s not perfect symmetry about the arguments. It’s not a foregone conclusion that rebates are bad. (Mr.) Clayton has said in the past that liquidity’s not free. A pilot would bear that out. Clearly the SEC is pro-pilot, but it’s equally clear that the effect on liquidity is more in question.

“We have the most mature, sophisticated liquidity market on the globe,” Mr. Maragos said. There’s nothing wrong with providing incentives. Just changing the market structure doesn’t change the issue. That will all come out in the comments on a pilot. This is a pretty big deal. If there’s a pilot on something this big, there will be a lot of voices weighing in. The SEC has always sought to get participation in establishing a pilot.”

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