NYSE WINS REGULATORY APPROVAL FOR MARKET MODEL CHANGES

Posted October 24, 2008

NEW YORK – NYSE Euronext has won approval from the US Securities and Exchange Commission (SEC) for its next-generation market model plan and a pilot program to attract new liquidity providers. The exchange plans to begin implementing both initiatives next week, and put them completely in place in November.

“Fast, electronic trading is the norm now, and our trading customers are looking for us to go beyond just fast and electronic – to offer something more. They want a market that encourages participants to add liquidity and helps them trade larger orders more efficiently,” says Lawrence Leibowitz, Group Executive Vice President in charge of US Markets and Global Technology at NYSE Euronext.

In the new market model, specialists will become Designated Market Makers (DMMs) who will be responsible for providing liquidity, better access to capital and risk-management capabilities, and will have trading parity with other market participants, as well as equal access to information.

The pilot program will establish Supplemental Liquidity Providers (SLPs), new upstairs, electronic, high-volume members given incentives to add liquidity on the NYSE. The program will reward aggressive liquidity suppliers, who will complement and add competition to existing quote providers.

“The NYSE is providing customers with a unique range of solutions for these challenges – a rich combination of high-tech and high-touch features that no other market offers,” says Leibowitz. “Our listed companies and their investors also stand to benefit from the resulting tighter spreads, lower volatility and higher level of price improvement.”