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To: TFF who started this subject	10/16/2003 2:04:18 PM
From: TFF	of 12617

AMEX FEE FACTOR By JENNY ANDERSON -------------------------------------------------------------------------------- SAL SODANO Email Archives Print Reprint October 16, 2003 -- Bowing to pressure from two of its most powerful member firms, the American Stock Exchange will slash a set of controversial fees that had roiled the Trinity Place trading floor. Embattled exchange Chairman Sal Sodano has told the Amex floor community that fees on its options and exchange-traded funds will be reduced by Nov. 1, sources say. Sodano is reacting to an effort by the exchange's leading specialists - including Susquehanna and Spear, Leeds & Kellogg, a division of Goldman Sachs - to make the Amex more competitive with other regional exchanges, many of which have no trading fees. Both specialist firms declined comment. "We are committed to making sure the institution remains cost-competitive," said Amex spokesman Robert Rendine, who confirmed the fees would be lowered. "We are always looking to keep fees as low as possible." Traders were not overwhelmed by Sodano's gesture. "It's too little, too late," said one Amex specialist. "We've heard similar things in the past and either not seen them develop at all or come out in such a way that is not useful." Management's decision to lower fees - which generate about $40 million a year in revenue - comes amid tremendous turmoil at the exchange. Amex's market share in equity options has fallen to 22.3 percent in 2003 from 30.6 percent in 2001, according to the Options Clearing Corp. The price of a seat on the Amex has fallen by more than 72 percent since the late 1990s. And an SEC investigation revealed inadequate regulation and a cover-up related to the agency's probe. Sodano himself is under the gun for his pay package - which included a salary of $5.6 million in 2002 and an exit package of about $22 million, contingent on such things as the Amex's pending sale from the NASD to private equity firm GTCR. The Amex has said it raised the fees in part because it must maintain a regulatory arm to monitor its floor while competing against regional exchanges such as the Cincinnati Stock Exchange, which does not have floor operations. Specialists and market makers on the New York Stock Exchange and the Chicago Stock Exchange pay no fees to trade popular instruments.

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