Proposed Changes Would Modernize NYSE Trading
In an effort to modernize the New York Stock Exchange, chairman John Thain is proposing the use of computers to speed up the 212-year-old auction system, the Wall Street Journal reported.
Thain's plan, which had been expected for some time, may not go far enough in addressing demands for change from mutual fund companies and other investors, who had threatened to flee toward the Nasdaq and other fully computerized markets unless the NYSE modernized it's trading, the Journal reported.
The Big Board's proposal, which is subject to Securities and Exchange Commission approval, would combine the existing human-based "open outcry" system with an expanded ability to trade electronically, the Journal reported.
"The main purpose is to respond to our customer base to maintain our market share,” Thain said at a news conference held amid intense security in the aftermath of reports that terrorists had targeted the exchange. Thain said he would like to see the changes in place within a year.
Former NYSE chairman Richard Grasso, still embroiled in dispute with the exchange over the pay package that forced his ouster last fall, had yielded to floor traders who feared for their jobs by protecting the auction system.
Thain expects there will still be detractors. "There will always be a few that will say it doesn't go far enough," Thain said of his proposal.