A pitched battled is underway among the major exchanges for dominance in the market for exchange traded funds (ETFs). The current undisputed leader is the New York Stock Exchange (NYSE), with 1,543 listings valued at $2.3 trillion. Its chief rivals are Nasdaq​ and Bats Global Markets Inc., which together trade about $200 billion in ETF assets, as reported in a story in the Wall Street Journal.

However, since the end of 2014, the NYSE has lost 89 listings to Nasdaq and Bats. Of these, 30 have been in this month alone. Meanwhile, of 237 new ETFs launched so far in 2016, less than half, or only 112, list on the NYSE, according to ETF.com. The NYSE responds that they got 70% of the biggest new funds.

The Battle for Volume

Nasdaq and Bats are undercutting the NYSE’s listing fees, and even offering some listings for free. Nasdaq is tossing in free advertising on its giant Times Square electronic billboard. Bats is even paying for some listings, contingent on specific targets being met, the Journal said.

While an ETF can trade in multiple marketplaces during the day, transactions at the open and the close are executed at the exchange where it is listed. Trading volume tends to be especially brisk in these few seconds, generating transaction fees for the exchanges that far outweigh listing fees.

Diversification Against Trading Glitches

The NYSE’s reputation has been tarnished by a string of recent technical glitches that have halted trading, including two incidents last week. This has prompted ETF issuers to spread their listings across multiple trading platforms. For example, in January BlackRock Inc. (BLK) announced that it would move 11 of its ETFs from the NYSE to Nasdaq and Bats for this reason, according to the Journal.

Nasdaq and Bats argue they offer superior speed, sophistication and reliability. To this end, Bats in particular has been raiding top talent from the NYSE, including its head of ETF listings, another move that's sure to increase pressure on the NYSE.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.