| NYSE
Euronext will cut some transaction fees and close half of the
trading rooms at the New York Stock Exchange after its share of the
U.S. equity market dropped to a record low. |
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Brokerages will be able to execute some
trades at the Big Board at no cost and will receive higher payments
for sending some orders to the NYSE Arca electronic market, the New
York- based company said in a statement today. By shutting two of
its four remaining rooms, the NYSE will shrink to its 1963 size as
increased automation allows brokerages to process more shares with
fewer floor traders. |
| While NYSE Euronext President Duncan
Niederauer has created incentives to lure trades back to the
exchange, the NYSE's market share fell to an all-time low of 42.7
percent in July after losing almost 7 percentage points since 2004.
Chief Executive Officer John Thain in April hired Niederauer, a
former colleague from Goldman Sachs Group Inc., to recover lost
business. "This is doing whatever they can in
the hope they can retain a certain level of market share," said Sang
Lee, a managing partner at Aite Group LLC, a Boston-based consultant
to brokerages and institutional investors. "We will continue to see
downward pressure on pricing levels. When everybody is fighting for
market share the first thing that gets hit is pricing." |
| NYSE Euronext fell 21 cents to $70.83
at 11:02 a.m. in New York trading. The stock has posted the worst
performance this year among 22 publicly traded exchanges worldwide,
according to Bloomberg data. The shares have dropped about 26
percent, compared with a 28 percent gain for the FTSE/Mondo Visione
Exchanges index. |
| NYSE Euronext is seeking to
capitalize on its two markets, which offer brokers the speed of
automated transactions on Arca and the potential for floor traders
to handle larger orders, NYSE Euronext President Duncan Niederauer
said today at the Lehman Brothers Holdings Inc. financial services
conference. The new fees will take effect in October and the rooms
will be shut by November, Niederauer said today. "We can almost play off one another,"
Niederauer told investors. "Have we lost some market share in the
U.S.? Absolutely, but we still find ourselves in a very strong
position." |
| Nasdaq Stock Market Inc, the
second-largest U.S. equity exchange, said yesterday it gained the
most market share against the NYSE in a year, matching an all-time
high of 19.3 percent of NYSE-listed shares that changed hands in
August. |
| The NYSE will allow brokers to trade
for free if their transaction is matched against incoming orders,
according to the presentation. The fee for trades executed against
orders already in place will increase from 2.75 cents per hundred
shares to 8 cents per hundred shares. |
| Under the plan, the NYSE Arca
electronic exchange will increase its rebate for trading NYSE-listed
stocks by 5 cents a share per hundred to 25 cents. The rebates are
only for trades executed against incoming orders. At the same time,
Arca will lower by 5 cents to 25 cents per hundred the fee it
charges brokers for trades executed against orders already in place. |
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