|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
NYSE Challenges Sec Proposal
Staff Writer
CBS Marketwatch . December 16, 2004
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EXCERPT: A proposal to open the bid and order book on the floor of the New York Stock Exchange to other markets would hurt investors, Chief Executive John Thain said Thursday. Thain, speaking with reporters, said the rule, which would publish the bids and offers on stocks to other markets, would make it hard to fill orders from other markets in times of unusual trading. Under a proposed rule issued by the Securities and Exchange Commission on Wednesday, so called "depth of book" bids and offers -- information only seen by specialists on the floor -- would be shared with rival markets. See full story. Right now, "investors are able to make a choice about where and how their orders are to be displayed," Thain said. "A central file will not make investors happy." The proposal is one of two offered by the SEC. Another would require only the best bids and offers from each market to be published. In effect, the move will create a kind of central order book where each market's best bids and offers would be displayed. "When you move to a centralized order book you really do undermine the basis of competition between markets," Thain said. "It is a fundamental change." William Cline, a partner in the capital markets practice at Accenture, said the NYSE may be trying to protect specialists who use the bid and offer book to even the market when there are too many buyers or sellers in a stock. The NYSE has asked the SEC to approve an expansion of electronic trading on the floor. Electronic trades through the Direct Plus system, which limits trade size and regularity, represent only about 10 percent of the NYSE's volume. |
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