Schwab Complains to Congress of NYSE Fee Increase for Quotes
Washington, June 18 (Bloomberg) -- On-line brokerages, whose
customers want the latest market information, complained to
Congress that they're being disproportionately hit by a doubling
of fees paid for real-time stock quotes.
A New York Stock Exchange-administered group of national
markets began a pilot program in October that raised fees they
charge brokerages for up-to-date quotes of all stocks listed on
national markets.
Martha Deevy, a senior vice president at San Francisco's
Charles Schwab Corp., said the world's largest on-line brokerage
has absorbed the extra cost, but has had to delay some quotes
provided to customers.
''This makes it harder to give individual investors a level
playing field,'' Deevy told the House Commerce subcommittee on
finance.
A New York Stock Exchange spokesman declined comment.
Earlier this year, the exchange group, called the Consolidated
Tape Association, defended its fee increase as ''fair and
reasonable,'' telling Schwab that it was not discriminatory
because it applied equally to all broker-dealers.
Deevy asked the congressional panel and the Securities and
Exchange Commission to require exchanges, including the NYSE, to
reduce fees ''to a level that more accurately reflects their
costs in providing the information.'' Echoing that request was
Joseph Fox, chairman of Web Street Financial Group Inc., another
on-line brokerage.
The chairman of the House panel, however, said he has no
plans to weigh in on the issue. ''I don't expect efforts to
pressure anyone would be successful, at least in short term,''
Representative Michael Oxley, an Ohio Republican, said in an
interview.
The exchanges, while charging fees for real-time quotes,
don't charge brokerages for quotes that are delayed for 15 to 20
minutes, said Scott Campbell, a Schwab associate general counsel.
While Schwab now is providing more delayed quotes to its
customers, that information is less useful, he said in an
interview.
Customers of on-line brokerages are more affected by the fee
increase because they rely on real-time quotes more heavily than
clients of more traditional firms, Campbell said.
The exchange fees were doubled to a penny a quote, from half
a penny, increasing Schwab's costs by millions of dollars a year,
he said.
Schwab also complained to the SEC in a March letter about
the NYSE fees and asked the agency to step in.
SEC spokesman Chris Ullman said the complaint involves ''a
complicated and contentious issue, and one that we are currently
looking at.''
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