NYSE Demise of trading floor leads to volatility
NYSE Demise of trading floor leads to volatilityA New York Stock Exchange member is the latest to slam new US trading regulations, warning the demise of the Big Board’s trading floor is leading to a rise in volatility.
Joe Saluzzi, co-head of equity trading at Themis Trading, an agency broker for fund managers, said: “There’s no human specialist intervening to increase market liquidity anymore – it is all going to screen trading. In the old days, the specialist would get in between to make more of a stable market. Now that is going away, the end result is more volatility on NYSE.”
Volumes on NYSE’s trading floor have dwindled since the US regulator introduced Regulation National Market System on March 7. The trading rules, which were delayed by a month after NYSE requested more time to launch its hybrid system, require brokers to execute trades as effectively as possible, prompting a shift from the floor to screens. The exchange does not maintain data on floor-based trading activity but Saluzzi estimates the share of trading conducted manually has fallen by a third to half in the past two months.
John Thain, chief executive of NYSE Euronext, said this month: “Are we big enough to afford to maintain the cost of the floor in an environment that’s becoming increasingly electronic? The answer is yes. But we’ll see how the market evolves.”
But many of NYSE’s top brokers have reduced their number of floor staff this year. UBS took out 23 of its 30 floor positions in March, while Dutch marketmaker Van der Moolen, Bank of America, Lehman Brothers and Goldman Sachs have laid off specialists and direct market access staff. The exchange cut its staff numbers by more than a third last year to 2,578.
Saluzzi is the latest broker to have criticised Regulation NMS. Richard Rosenblatt, chairman of Rosenblatt Securities, said in March: “The benchmark is whether automation makes the process more efficient but I suspect NYSE and the Securities and Exchange Commission have gone too far with the assumption that transparency equals liquidity.”
Full articleLabels: derivatives trading, electronic exchanges, electronic trading, NYSE, sstock market
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NYSE since 1979 and chairman of Rosenblatt Securities, issued a warning about the automation of the exchange. "The benchmark is whether automation makes the process more efficient but I suspect NYSE and the Securities and Exchange Commission have gone too far with the assumption that transparency equals liquidity," Rosenblatt said.
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Is keeping America as center of financial world is good for all?
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America's position as the center of the finance world is in peril, according to this author, and expenses associated with regulations such as the Sarbanes-Oxley Act are partly responsible. Joseph B. Fuller, chief executive officer of advisory firm The Monitor Group, wrote in an op-ed piece that America's preeminence in the field is worth defending, and "what we all should realize is that, despite its many shortcomings, the U.S. regime contributed mightily to growing global prosperity."
full articleUS, american regulations, FED, SEC, NYSE, NASD, market leadership, global marketsLabels: american regulations, FED, global markets, market leadership, NASD, NYSE, SEC, US
Man vs. machine: Algorithmic trading pressures locals
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full storyLittle guys suffer as Wall Street enters machine eraThe end of an era is approaching on Wall Street, where the number of humans who work the trading floors is dwindling. And although NYSE CEO John Thain said that there would always be a need for specialists on the exchange, no one expects to see a return to the teeming pits of yesterday. And perhaps the people most likely to be hurt by the change are the small merchants in Wall Street. "Machines and computers don't eat and drink," one bar owner said.
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Tokyo Stock Exchange Wants a Makeover
Labels: global markets, NYSE, stock exchange, TSE
