The exchange group’s chief executive and co-founder, Brad Katsuyama, said in a statement on social media that a new fee structure will be implemented later this year for a small subset of highly active clients that use extra ‘logical ports’.

Logical ports, also known as trading sessions, are used by broker dealers to submit orders to exchanges. As of October, IEX will offer its members access to five ports for free, and then charge $100 per month for additional ports. Katsuyama said around 25% of IEX’s clients will incur the extra fee.

The move follows IEX’s decision to disclose its costs of producing market data and connectivity earlier this year, which stated that the costs associated with supporting logical ports is around $1.5 million per year, or roughly $83 per month, per port. IEX was the first US exchange operator to publicly disclose its market data and connectivity costs amid widespread debate about overpriced exchange data and connectivity products.

“After disclosing our costs to provide market data and connectivity, we actually had some members encourage us to at least cover our costs in providing these services,” Katsuyama said about the new fee structure.

“We were also focused on ensuring that our new fee filing aligns closely with the requirements of the Securities Exchange Act of 1934… which [requires] that exchanges provide the information necessary to show that fees are fair and reasonable and do not impose a burden on competition.”

Despite market data and connectivity fee filings traditionally effective immediately, IEX said it has decided to delay the adoption of the free structure to provide its members with time to assess the changes, and provide any feedback.

“We are hopeful that our rationale for this change makes sense and that the standard we are setting for exchange fee filings raises the bar for all exchanges going forward,” Katsuyama concluded.

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A panel at the Fixed Income Leaders Summit conference in Boston this week discussed the ‘artificial barriers’ asset managers face and agreed platforms need to adopt an all-to-all nature to ensure firms do not need to connect to multiple platforms to find liquidity.

Chip Bankes, head of trading at Loomis Sayles & Co. explained to delegates the barriers in trading bonds “comes down to nonconformity of connectivity”.

Bankes added: “From a technology budget standpoint, it’s difficult for Loomis Sayles to link to all of the platforms. An all-to-all platform where all participants can connect is needed.”

A fixed income platform evaluation day at the event found there are now 101 platforms on the market, and this is still increasing and causing further fragmentation.

The panel agreed that the ability to access the market with consistence across venues and platforms is key for connectivity.

Sam Priyadarshi, head of fixed income derivatives at Vanguard, told the panel certain firms don’t have access to certain markets and “larger clients have better liquidity and therefore better prices.”

The panel also discussed the complexities of price formation in the bond market where the panel agreed it can be difficult to figure out which price is executable.

Pryadarshi added the market is perceived as an “economy between price makers and price takers” but the distinction between the two will become more blurred.

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The deal will see SGX create the SGX Chicago Hub, hosted in CME’s Autora, Illinois data centre, enabling North American customers to connect directly to SGX.

SGX said the hub will offer cost-effective access to its portfolio of equity, FX and commodities futures contracts approved for trading in North America.

This is the latest in a partnership between CME and SGX which began in 1984 with its mutual offset agreement.

Loh Boon Chye, CEO of SGX, said: “SGX is Asia’s most connected exchange and this is an important step in enhancing our links with the North American market and broadening our internationalfootprint. 

“Connectivity in today’s evolving capital markets is essential to serving our customers’ needs. Through this point of presence we will bring investors in North America closer to Asia’s markets while entrenching SGX’s role as the world’s largestoffshore market for Asian equity index futures.”

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