I'm not sure what the boys are not liking, but it's probably their bottom line.
I think, Mark, that buyside institutions are upset because what people are citing as "less liquidity" is not quite that, but more accurately, higher market impact. Sure, there are generally the same amount of shares out there as there were before...but now, there are more levels to distribute them on, and more chances to pull, such that the frequency of runaways is far higher.
Another item is the administrative problem of, as previously mentioned, having to give reports far more regularly than when we were in eighths and teenies; what used to get 75% of an order done over 4 levels now might only fill 40% over a dime, which means a lot of back and forth between the buyside and sellside.
The only part of the bottom line that might be effected would be spreads, which is but one - and not the major - revenue generating activities at the hands of dealers. Sales credits, commissions, proprietary transactions, providing risk capital, and the like haven't changed since decimals came about; in fact, more risk capital is required now that the market impact is so much higher than it has been in the past.
That said, though: small dealing firms with unreliable, few, or no layoff customers or institutional order flow could conceivably see their margins impacted greatly, and subsequently be forced to merge with other firms or fold within a few years.
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