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Date Posted: 13:22:29 08/27/03 Wed
August 27, 2003
By John Shipman
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The New York Stock Exchange recently reduced its listing fees for closed-end funds, citing increased cost pressures in the closed-end fund industry.
Even with the listing-fee cut, the Big Board's charges will still be higher than those levied by the American Stock Exchange, though not as substantially as before.
The Amex has won some high-profile closed-end listings this year - largely because of its lower cost structure - and that's something that has no doubt grasped the attention of NYSE executives.
In its rule-change filing with the Securities and Exchange Commission dated Aug. 18, the NYSE said the move to lower fees "will benefit investors because incurred costs are paid from the investor's equity raised for the closed-end fund offering."
Instead of charging certain fixed amounts for every one million shares listed, the NYSE will now charge rates using a three-tiered structure based on the number of shares outstanding.
For example, funds with up to 10 million shares will be charged $20,000. For more than 10 million and up to 20 million, the fee will be $30,000, and for more than 20 million, the cost is $40,000.
Previously, the NYSE charged more than $205,000 for a fund to list 50 million shares. In the new fee structure, such a listing will initially cost $40,000.
In its SEC filing, the NYSE said this year the smallest fund listing paid an original listing fee of $44,000, and the largest new listing paid the maximum $250,000.
By comparison, the Amex charges a $5,000 flat fee for an initial closed-end fund listing, regardless of size.
"Competition does illicit a response," commented Tom Rzepski, vice president with the Amex's exchange-traded funds marketplace, on the Big Board's fee change.
Rzepski pointed out that while the NYSE has narrowed the gap between initial fees charged by the two exchanges, ongoing annual charges for closed-end funds, which the NYSE did not alter, remain substantially different.
For a family of closed-end funds, the Amex caps its annual fees at $30,000, compared with the NYSE's fee cap of $1 million per year.
A NYSE spokeswoman said the fee reduction came as a result of the exchange's "long-term discussion with closed-end funds and the fund industry, and their increased focus on reducing costs."
-John Shipman, Dow Jones Newswires; 201-938-5171;
john.shipman@dowjones.com
(END) Dow Jones Newswires
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NYSE Lowers Listing Fees For Closed-End Funds