NEW YORK (Reuters) - The New York Stock Exchange has urged its members to denounce a plan by rival exchange operator Bats to compete for end-of-day orders of NYSE-listed companies, saying it would make it harder to get trades done and would distort stock prices.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2017. REUTERS/Brendan McDermid - RTS151B8

Bats, the No. 2 U.S. stock exchange operator, said last week it plans to offer brokers a type of order that would give them the same prices as the closing auctions for NYSE- and Nasdaq-listed securities, but with lower execution fees.

“The proposed order type will harm one of the most relied-upon aspects of modern market structure, the closing auction,” Stacey Cunningham, NYSE’s chief operating officer, said in a letter to traders on Tuesday, which was obtained by Reuters.

Intercontinental Exchange Inc's ICE.N NYSE confirmed the contents of the letter.

If approved by regulators, the move by Bats would be “detrimental to transparency, liquidity, and price discovery,” Cunningham said.

In response, BATS said its proposal was made at the behest of market participants asking for “long-overdue pricing competition.” Some brokers already provide a similar service, it added.

Closing auctions attract massive volume as fund managers generally price their assets to the closing prices of listing exchanges and execute most of their orders at that time.

NYSE, the top exchange operator by market share, said diverting trades away from closing auctions would add to volatility and result in less accurate pricing.

Daily volume in the auctions has risen more than 70 percent, to almost 350 million shares, in the past five years, while fees have increased from 16 percent to 60 percent at the NYSE and Nasdaq respectively, Bats said.

Under Bats’s plan, orders would be pre-matched 25 minutes before the 4 p.m. market close. Those not matched would be sent to the NYSE and Nasdaq auctions.

Bats lists the stock of its parent company, CBOE Holdings CBOE.O, but has otherwise focused on listing exchange-traded funds.

NYSE, which controls four stock exchanges, said the move by Bats, which also has four, would further fragment the market as different exchanges would have different auction cut-off times in the same security.

“This increased fragmentation and complexity creates incentives for brokers to add layers of routing rules and behaviors to capture fractional cost savings to the detriment of market quality,” Cunningham said.

NYSE asked its members to speak out against the Bats plan through industry groups and regulatory comment letters.