NYSE Arca's new trading fee schedule for U.S. equities triggered an email from its rival BATS Trading last Monday criticizing the new rates as raising the cost for customers that don't qualify for the highest volume tiers.

The fee feud began on Friday, March 31st when NYSE Arca announced a new fee schedule for trading equities that offers volume discounts to the most active traders in NYSE-listed (Tape A) and Nasdaq (Tape C) listed securities. "The takeaway is that we're offering the best rates to more active customers in tape C and we're offering the highest rebate to customers on Tape A," says Colin Clark, VP of strategic initiatives at NYSE Euronext,

While NYSE Arca said the new fees are the most competitive rates, including highest rebate and lowest "take" fee, among major U.S. equity markets, BATS is challenging those assertions.

On April 1st— the day the new rates took effect— BATS Trading CEO Joe Ratterman fired off an email that criticized the NYSE Arca fees as rewarding only a few Arca customers that are trading more than 60 million shares per day, its highest volume tier.

"For everybody else your Arca access fees are going up," wrote Ratterman in the email. "For a majority of Arca customers, the access fees in Tape C are going from 25 mils to 26 mils. That's a full 1 mil increase," noted Ratterman in the email. "Put another way, a vast majority of Arca customers will start paying more to access the Arca market so that a handful of Arca's customers can start paying less," wrote Ratterman in his missive titled, "Transparency in Trading Models?" BATS' CEO also pointed out that Arca's customers were given short notice— less than 24 hours — and that many are likely scrambling this morning (April 1st) to update their routing tables based on the sudden increase in prices."

For all customers (regardless of volume levels), NYSE Arca's rebate is 20 cents per share for adding liquidity and 26 cents per share for orders that take liquidity. Prior to this price change, the take fee for all customers in Tape C securities was 25 cents per share.

In an interview with Advanced Trading, Clark says, "The take-fee on Tape C (for Nasdaq-listed securities) is balanced by a more attractive rebate as well as tiered pricing that is unmatched for more active firms."