Tiers make identical trades cost different amounts for different firms, and they create sharp incentives near month-end to push volume over a threshold — which is itself a distortion venues are happy to encourage.
Tiers usually key off the participant's share of consolidated volume or an absolute share count, sometimes with separate adding and removing requirements.
Example: tier 1 pays $0.0020 per share added, tier 3 pays $0.0029 at 0.30% of consolidated volume. A firm adding 60 million shares a month sitting at 0.28% earns $120,000. Pushing to 0.30% lifts it to $174,000 — a $54,000 swing that justifies trading extra volume at a small loss late in the month.
Related: rebate, maker-taker, exchange-fee, commission