The London Stock Exchange has lowered fees by 50% for exchange traded fund market makers as the bourse tries to increase its market share of ETF trading, the Financial Times reports.
The LSE has cut fees for its 26 registered ETF market makers to 0.1 from 0.2 basis points in a move designed to boost liquidity in the financial products.
ETFs are baskets of securities that trade on an exchange like individual stocks. ETF mangers rely on market makers to ensure liquidity and tight spreads in their products.
Gillian Walmsley, head of fixed income products at the LSE Group, in the FT story said slashing fees for market makers should help increase trading volumes and support liquidity in the ETF market.
The LSE’s market share of European ETF trading has grown from 18% in January 2012 to 26% in April 2013, according to the report. [Bond ETF Trading Spikes in London]
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