The project seeks to interconnect participant exchanges' trading systems and to develop a global market structure based on the principles of transparency, self-regulation and agency-auction price discovery. The participant exchanges include major equities markets from the three main time zones: Asia-Pacific, Europe, and the Americas. The market capitalization of the companies listed on these Exchanges exceeds $20 trillion, of which the NYSE's listed domestic companies represent approximately half.
GEM will seek to provide investors around the world with a transparent, around-the-clock trading mechanism for the world's global companies, thereby increasing the global liquidity of their stocks as well as facilitating global price discovery. Investors will be able to access GEM through their domestic stock exchanges, which will keep the exchanges' brand and individual standing while creating a single global pool of liquidity.
Participation in GEM is open to all stock exchanges that adhere to the principles of transparency, self-regulation, and the agency-auction model. GEM will actively pursue economies of scale that will lower transaction costs for investors and intermediaries, both in order execution and in the post-trade clearing and settlement process.
NYSE chairman and chief executive officer Richard A. Grasso said, "The agreement that we are formulating will strengthen and globalize our markets throughout the Americas and among time zones. We are excited by the challenge this great opportunity presents.
No further announcements regarding GEM talks are expected until a preliminary agreement is reached.
