In his response to Pitt's letter, PHLX Chairman Meyer "Sandy" Frucher said the PHLX would be willing to discontinue the program but stressed that it would be unfair to require the PHLX to do so unless all the other exchanges were also required to terminate their programs. Frucher also said he believes that the SEC should take the lead in banning exchange-sponsored payment for order flow.
"We have long felt, and we have long made it known, that the Philadelphia Stock Exchange opposes payment for order flow programs that are administered by exchanges. These programs have put unfair burdens on market makers and placed exchanges, which are self regulatory organizations, in the uncomfortable position of administering payment programs that rightfully belong between specialists and order flow providers," Frucher said.
Attached are copies of Chairman's Pitt's letter and the PHLX's response.
The Philadelphia Stock Exchange was founded in 1790 as the first stock exchange in America. The exchange trades nearly 2,100 stocks, over 1,200 equity options, 12 sectors index options and currency options. For more information about the PHLX and its products, visit www.phlx.com.
