Is wariness of GETCO as a designated market maker on the NYSE justified? Well, to some buy-side players, it's a bit jarring to see a major proprietary firm, a pioneer in high-frequency trading (high-frequency trading news) no less, become a major market in so many stocks. It conjures up fears of trading against a big-time firm that places its own interests above yours.

Advanced Trading offers an interesting look at the issue and found a mix of opinions. To some, this is grounds for caution. Many buy-side firms apparently asked their sell-side brokers to avoid interacting with the firm. But that may have been an overreaction. GETCO joins a group of four DMMs, Goldman Sachs (NYSE: GS), Kellogg Group, Bank of America (NYSE: BAC) and Barclays Capital. The DMMs receive a higher rebate for supplying liquidity than any other group, 30 cents per 100 shares versus 17 cents for supplemental liquidity providers.

Because GETCO was already a so-called supplemental liquidity provider, the move seems logical in the eyes of many. What's more, DMMs are bound by rules and regulations designed to enforce the NMS. Vanguard is among the companies that are less worried about GETCO's move. All that said, the goal of a DMM is to make money for its parent firm, and one challenge will be to sell the idea that its DMM operations do not play into its proprietary operations. But all the DMMs face that challenge as well. A bit of education and customer relations support would appear to be in order. 

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