The
Nasdaq said the exchange, to be called PSX, will be the first U.S. equity trading platform with a price-size priority model. The platform, which will be operated as a facility of the NASDAQ OMX PHLX exchange, has been approved by the
PSX will be an equity exchange model that encourages participants to display more shares at a price level. The allocation of shares is pro-rated based on a participant's size relative to the total size at that price level
According to Nasdaq's own website, PSX will offer "an attractive low take rate while still providing a rebate to liquidity providers."
For shares that execute above $1.00, transaction pricing will be: $0.0013 fee to remove liquidity, and $0.0020 rebate for adding liquidity
Last year,
Nasdaq's platform is reportedly in reaction to market developments this year in which regulators are questioning how much trading should occur in unlit venues.
Eric Noll, Nasdaq OMX’s head of transaction services, told The Financial Times the company was troubled that the markets had “effectively bifurcated over time into one that’s used by end users,'' such as asset managers, “and one that’s used by professionals [high-frequency and other traders].''
In the official announcement of the launch date, Noll said PSX will "provide a different trading model for customers looking for an equity exchange that rewards size and liquidity."