NZX Introduces Simplified Trading Fee Structure
NZX is pleased to advise that the previously announced Aggregate Trading Fee Cap will be implemented effective 1 August 2010. The Aggregate Trading Fee Cap (ATFC) is a simplified trading fee structure for NZX’s equity markets, the Main Board and the Alternative Market.
“The new fee structure will bring much needed simplicity to our equity markets, and it will enable NZX trading participants to try new ways to grow liquidity,” said NZX Head of Markets Fiona Mackenzie.
Under the Aggregate Trading Fee Cap, NZX trading participants will pay the lesser of their trading fees as calculated either under NZX’s Participant Pricing Schedule, or that specific firm’s trading fee cap.
The cap in the first year for a specific trading participant will be based on their average trading fees paid from 2007 to 2009. An example of how the Aggregate Trading Fee Cap will work is attached.
Participant A paid the following historical trading fees therefore their cap will be $260,000 in Year 1
based on the average of trading fees paid from 2007 to 2009.
2007 – 260,000
2008 – 240,000
2009 – 280,000
Average – 260,000
Scenario 1 – Participant A exceeds the cap
In Year 1, Participant A experiences strong volume growth in their equity trading business due to business
initiatives that result in new client growth. Their trading fees as calculated under the NZX Participant Fee
Schedule (available at http://static.stuff.co.nz/files/NZX_Participant_Fee_Schedule.pdf) are $272,000,
therefore Participant A’s actual trading fees paid are capped at $260,000. In Year 2, Participant A’s new cap
will be increased by 5% to $273,000 because they exceeded the cap in the preceding year.
Scenario 2 – Participant A does not reach the cap
In Year 1, Participant A volumes in their equity trading business are significantly less than their historical
volumes due to a loss of market share to one of their competitors. Their trading fees as calculated under the
NZX Participant Fee Schedule are $248,000, therefore Participant A’s actual trading fees paid will be
$248,000. In Year 2, Participant A’s cap will remain unchanged at $260,000 because they did not reach the
cap in the preceding year.