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Nasdaq’s plan for cutting prices infuriates rivals

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NEW YORK – Nasdaq OMX Group is pushing to cut the fees it charges big customers that trade on several of its exchanges, a move that is arousing the attention of regulators and triggering accusations from rivals that the company is seeking to stifle competition.

In late October, Nasdaq told U.S. regulators that it wanted to offer cheaper trading for customers of one of its options exchanges, if their total volume of trading with all three of Nasdaq’s options exchanges was substantial.

Regulators balked. The Securities and Exchange Commission put the proposal on hold in November, and asked rivals and customers for comment.

If approved, the Nasdaq plan could have far-reaching effects on competition, pricing and complexity in options and stock markets. Rivals claim it would end a level playing field by favoring larger exchange companies that run a number of different marketplaces over smaller players.

Competition is fierce in the U.S. financial markets, with 12 U.S. options exchanges and 13 U.S. stock exchanges, as well as dozens of alternative trading venues.

The latest standoff stems from an obscure feature of U.S. law that forces each individual exchange to offer the same pricing plans to all of its customers.

Because of the rule an exchange company cannot on the same market offer rebates favoring customers who place many orders while also giving discounts to customers who place a few very large orders, for example. Instead, the company has to set up different exchanges to meet the needs of different customers. Each exchange is supposed to compete with the others, even if they are owned by the same corporate parent.

Under Nasdaq’s proposal, the walls between those units would be effectively broken down. That’s what alarms smaller rivals and startups, who say that tearing down those barriers will allow Nasdaq and other established operators to offer cheaper pricing, stifling competition and entrenching the biggest exchange operators.

Nasdaq said in a lengthy rebuttal made public on Monday that some of its rivals were just looking to avoid competition. The SEC “should treat with substantial skepticism any argument by an exchange that a competitor should not be permitted to reduce its prices,” it said in a letter posted on the SEC’s website.

There is no rule explicitly banning the practice of aggregating volume across exchanges to provide discounts. There are, however, laws stating that each exchange’s fees cannot be unfairly discriminatory or hinder competition.

Nasdaq declined comment when contacted by Reuters.

“It’s a dramatic departure from previous precedent,” said Jeromee Johnson, who runs the BATS Global Markets’ options exchange.

Still, the idea is not necessarily bad as investors could ultimately end up with better prices, Johnson added. BATS runs two separate U.S. stock exchanges, and is merging with Direct Edge, which also runs two U.S. stock exchanges.

The proposed pricing plan could be used “benevolently,” to lower prices for some firms, or it could be used “malevolently,” allowing exchanges to use the bundled rebates to gain “mini-monopolies” on certain segments of the market, said Bill O’Brien, chief executive at Direct Edge. The proposal needs to be scrutinized, he added.

SEC REVIEW

Nasdaq is looking to lower trading costs for customers of its Nasdaq OMX Phlx options exchange that also do business on its two other U.S. options markets, Nasdaq Options Market and Nasdaq OMX BX Options. To qualify for the rebate, the customer need not do business with all three exchanges, but its total volume of trading must meet a certain threshold.

In 2009, Nasdaq tried to lower transaction fees for key customers of its main U.S. stock exchange that also did a certain amount of business on Phlx. The SEC repealed that proposal, saying it was not clear if it met the statutory rules.

In scrutinizing the latest proposal, the regulator will consider whether it is anticompetitive for individual exchanges to act together to encourage trading activity, two people familiar with the SEC’s thinking said.

The regulator will also look at the potential impact of Nasdaq’s proposal on the principle of equitable allocation of fees, they said. That means, for example, if two Phlx members trade the same amount on the exchange, but one also trades on an affiliate exchange and therefore qualifies for an extra rebate on Phlx, is it fair to the Phlx member who did not qualify for the rebate?

Nasdaq said the proposal would lead to lower trading costs, and is therefore pro-competitive – an argument that one of its biggest customers, hedge fund and market maker Citadel, supports. Further, any exchange that felt at a disadvantage by having just one platform could simply open other exchanges, and operate similar pricing formats, Nasdaq added.

Deutsche Boerse’s International Securities Exchange (ISE), which recently launched its second U.S. options exchange, says it isn’t as easy as that, warning that the process of getting its new platform off the ground took years and overall costs ran into the multiple millions of dollars.

“Can exchanges that supposedly compete against each other cooperate to establish joint fees?” ISE wrote in a letter to the SEC. “We believe that the answer is a resounding ‘No.'”

MIAX Options Exchange, which opened just over a year ago, said it could not compete against a structure that leverages trading volume and fees over three competing exchanges.

The proposal “would severely hinder competition amongst options exchanges and damage the existing market structure that is built on competition and innovation,” MIAX told the SEC.

The SEC has until May 23 to make a decision, although that date could be extended.

Nasdaq is looking to ensure the SEC hears all of its arguments. Prominent Washington DC lawyer Eugene Scalia filed a legal motion on Friday with the SEC on Nasdaq’s behalf, asking that parties who submitted comments on the proposal be required to appear before the SEC to present oral arguments supporting their positions, according to a document obtained by Reuters. Scalia, the son of Supreme Court Justice Antonin Scalia, was not immediately available for comment Tuesday afternoon.

The exchange operator said in the document that it wants to be sure it has the chance to rebut any arguments made by other participants.

– REUTERS

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PENGASSAN Urges Strategic Focus on Local Refining Expansion

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The Nigerian authorities have been called upon to focus on strengthening domestic refining capacity.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) made the call in a communiqué issued at the end of the three-day PENGASSAN Energy and Labour Summit (PEALS 2026).

It stressed the need for adequate protection for refineries operating in the country.

The PENGASSAN said Nigeria must reduce the economic inefficiency of exporting crude oil while importing significant volumes of refined petroleum products by creating an environment that supports domestic refining and other value‑adding activities.

The communiqué, signed by the union President, Festus Osifo, and General Secretary, Jerry Amah, stressed the need to protect refineries, including Dangote Refinery and Waltersmith Refinery.

The association said the expansion would enable Nigeria to retain a greater share of the value generated from its petroleum resources while creating jobs, conserving foreign exchange and stimulating industrial development. PENGASSAN linked the growth to wider opportunities in petrochemicals, gas processing and other downstream activities.

READ ALSO: Umar Cautions Against Irregular Policies in Nigeria’s Oil Industry

The communiqué reads in part: “The summit called for sustained policies and investments to expand Nigeria’s domestic refining capacity and reduce the economic inefficiency of exporting crude oil while importing significant volumes of refined petroleum products. The need to protect refineries (such as Dangote Refinery, Waltersmith Refinery, etc.) within Nigeria’s jurisdiction was emphasised.

“Nigeria must progressively retain more value from its petroleum resources through domestic refining, petrochemicals, gas processing and other value‑adding activities capable of generating employment, conserving foreign exchange and stimulating industrial growth.

“Ultimately, the strength of Nigeria’s oil and gas industry will not be measured merely by the resources beneath the ground, but by the projects delivered, the value created, the Nigerian capabilities developed, the decent jobs sustained and the prosperity generated for the Nigerian people.”

The association also warned that abrupt policy changes, overlapping mandates, repetitive approvals and conflicting directives increase the cost of doing business and weaken Nigeria’s competitiveness for global energy capital.

The PENGASSAN called for faster regulatory approvals, digitalised processes and clearer timelines, arguing that the effectiveness of regulation should be measured by its impact on investment, production, government revenue, job creation and national value rather than simply by the number of licences or approvals issued.

On gas, the PENGASSAN advocated an integrated approach to developing Nigeria’s more than 215 trillion cubic feet of proven reserves, including investments in processing facilities, pipelines, storage, LNG, LPG and CNG infrastructure. It said gas should be deployed more aggressively for power generation, manufacturing, transportation, fertiliser and petrochemical production.

The association also urged stronger protection of workers’ rights, occupational safety and employment during mergers, acquisitions, divestments and asset transfers, saying sustainable investment requires skilled and fairly treated workers and that increased production must not come at the expense of workers’ lives and wellbeing.

In addition, the PENGASSAN said the next phase of Nigeria’s petroleum industry must focus on execution with measurable targets and clearly assigned responsibilities to ensure policies translate into projects, production, investment and sustainable employment.

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PENGASSAN to Link Up with NUPRC to Unlock 3mmbopd

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Two key stakeholders in Nigeria’s oil and gas industry have resolved to work closed to unlock three million barrels per day (bpd) of crude oil by 2030.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), according to the new President of former, Comrade Bosun Olabiyi-Agoro, would be working closely with each other to attain the objective.

He made the disclosure on Wednesday while on a visit to the NUPRC corporate headquarters.

The Head, Media and Corporate Communications, NUPRC, Eniola Akinkuotu, who made the disclosure in a statement, also credited the PENGASSAN President with declaring that inasmuch as the union is open to negotiations, issues bordering on the rights of workers to freely associate and join the union are non-negotiable.

READ ALSO: Tinubu Banks on NLNG Train 7 to Boost Nigeria’s Gas-led Economy

He made it public that issues surrounding contract staffing will be one of the key issues his administration will address.

“The President of Nigeria has an ambition which he runs through the CCE which is to make sure that by 2030 we are able to produce three million barrels per day. All of us have to work to make that happen. It will be our happiness to make sure that that target is actually attained. We can assure you that we are here to collaborate. We will be very reasonable,” Olabiyi-Agoro assured.

On her part, the Commission Chief Executive, Oritsemeyiwa Eyesan, said the President Bola Tinubu-led Federal Government had been working assiduously to increase production as evidenced by the latest executive order which is targeted at deep offshore investments. She noted that production had risen from a low of 1.1mmbopd a few years ago to an estimated 1.755mmbopd in 2026.

Seeking the support of PENGASSAN to achieve this target, Eyesan, said industrial stability remained critical to hitting higher production targets.

“As you settle into your new role, be assured that the commission will give you 150 per cent cooperation. In addition to the support we will give you, we want to ask that we work very closely to actualise government objectives.

“We want to grow production from our current level to 3 million barrels in 2030. For gas, we are still doing under 8bcf and we want to grow that to 12bcf by 2030. So, let’s make that happen,” she stated.

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Tinubu Banks on NLNG Train 7 to Boost Nigeria’s Gas-led Economy

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As the multi-billion-dollar Nigeria LNG Limited (NLNG) Train 7 Project reaches more than 90 percent completion, President Bola Tinubu has described it as critical to Nigeria’s gas-led economic agenda.

According to Tinubu, the successful delivery of the project would help expand Nigeria’s gas exports, create jobs, deepen local capacity and strengthen investor confidence in the country’s oil and gas sector.

The President spoke at the State House, Abuja, on Thursday when he received an NLNG delegation led by its Managing Director and Chief Executive Officer, Adeleye Falade.

The delegation briefed the President on the progress of Train 7, prospects for further expansion and challenges affecting the company’s operations and contributions to the national economy.

The discussions also covered the pricing and accessibility of liquefied petroleum gas (LPG), trucking along the Bonny-Bodo Road corridor, NLNG’s contribution to public revenue, its investments in the Bonny-Bodo Road and other social-impact projects, and the need for a more enabling business environment.

Tinubu congratulated Falade on his appointment, describing his assumption of office as coming at a defining period for the NLNG and Nigeria’s gas development ambitions.

Tinubu expressed the view that the completion of the Train 7 project must translate the country’s vast gas reserves into jobs, increased exports, industrial growth and long-term economic value.

“I congratulate you, Leye, on your appointment. Train 7 is at the centre of our national gas agenda. Its success matters not only to NLNG, but to Nigeria’s economic future,” the President said.

Tinubu commended the progress recorded on the project, describing Train 7 as a benchmark for project delivery, partnership, Nigerian content development and investor confidence.

He assured the NLNG management that the Federal Government would continue to improve the business environment, provide greater regulatory clarity and remove bottlenecks affecting major oil and gas investments.

“Nigeria is open for business, but it must be business that creates value at home — building capacity, supporting communities, protecting the environment and contributing to national prosperity. NLNG must continue to lead by example,” he added.

Responding, Falade thanked the President for his administration’s support for NLNG and the broader gas sector, assuring him that the company remained committed to the safe and successful completion of Train 7.

“With the project now over 90 percent complete, our immediate priority is to deliver the remaining work safely, efficiently and to the required quality, while preparing the plant for reliable and sustainable operations,” Falade said.

He said the project would increase Nigeria’s LNG production capacity, support export growth, create opportunities for Nigerian workers and businesses, deepen local participation and generate greater long-term value from the country’s gas resources.

Falade also restated NLNG’s commitment to supporting the domestic LPG market and improving access to cleaner cooking fuel for households and businesses.

He, however, called for coordinated action among the Federal Government, regulators and industry operators to increase domestic supply, improve storage and distribution infrastructure, eliminate avoidable costs and create a more transparent and efficient LPG market.

“Improving LPG accessibility is important to Nigeria’s energy transition and to the wellbeing of millions of Nigerian households. NLNG remains committed to supporting the domestic market, but improving affordability requires coordinated action across the entire LPG value chain,” he said.

The NLNG chief also sought the President’s intervention in addressing ease-of-doing-business challenges, particularly the proliferation of taxes, levies, charges and regulatory demands imposed by different tiers and agencies of government.

According to him, multiple and sometimes conflicting fiscal and regulatory obligations raise operating costs, create uncertainty and could discourage existing operations and future investments.

Falade assured the President that NLNG was ready to align more closely with the Federal Government’s development agenda and explore additional areas of partnership.

The meeting ended with a renewed commitment by the Federal Government and NLNG to sustain momentum on Train 7 as the project enters its final phase.

Both sides also agreed to strengthen their partnership to support the project’s successful delivery and NLNG’s broader contribution to Nigeria’s gas development and economic growth.

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