David Teather, Thursday April 21, 2005
New York Stock Exchange announced plans last night to become
a publicly quoted company in one of the biggest upheavals
in its 212-year history.
exchange is merging with the electronic trading firm Archipelago
Holdings. It will create a new firm called NYSE Group that
will become a conventional for-profit organisation and spin
off its regulatory arm into a not-for-profit entity.
The exchange's 1,366 "seat holders", its current owners, will
get $400m (£210m) in cash and 70% of the shares in the new
move will increase the volume of electronic trading on the
exchange although the chief executive, John Thain, said the
deal was "absolutely not" the end of the traditional floor
trading on Wall Street.
NYSE has been under increasing pressure from electronic exchanges
including the technology-heavy Nasdaq market. Confidence in
the floor traders, known as specialists, has also been undermined
by revelations that some were profiting illegally at their
Thain described the move as "an essential step to maintaining
our global competitiveness and leadership".
deal is subject to approval of the members and the securities
and exchange commission, the US watchdog.
Archipelago, based in Chicago, trades both shares and options
based on stock holdings. It handles about 25% of the trades
in stocks listed on the Nasdaq but has made little impact
on the NYSE, where more than 80% of listed stocks trade on
the exchange floor.
The firm's chief executive, Jerry Putnam, will become co-chief
operating officer and one of three co-presidents at the combined
group. Mr Thain will remain as chief executive.
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