NYSE Euronext (NYX) today announced that Barclays Capital, the investment banking division of Barclays Bank PLC, has agreed to acquire the portfolio of New York Stock Exchange designated market maker (DMM) assignments of LaBranche & Co. LLC.
The transition of DMM assignments to Barclays Capital from LaBranche is expected to occur in the first quarter of 2010, subject to regulatory approvals and other customary terms and conditions. The NYSE will work with Barclays to reallocate some of the portfolio in order to maintain diversification among DMM firms and NYSE-listed companies.
“We welcome Barclays Capital’s growing commitment to the NYSE market model, investment in trading technology, and dedication to NYSE-listed companies. We will work closely with both firms to ensure a successful transition on behalf of our listed customers and their investors,” said Larry Leibowitz, Group Executive Vice President and Head of U.S. Markets. “The expanded presence of a market leader such as Barclays Capital underscores the NYSE’s value to issuers, investors and the financial industry. We thank LaBranche for its longstanding service to the NYSE community.”
Designated market makers are at the center of the NYSE’s unique high-tech/high-touch market model, and have obligations to maintain an orderly market, quote at the National Best Bid and Offer (NBBO) and facilitate price discovery during openings, closings and imbalances. They are among the most active trading firms on the NYSE, accounting for an aggregate 9% of NYSE volume in the fourth quarter of 2009, up from 4% in September 2008, prior to the rollout of NYSE’s new market model. In the fourth quarter of 2009, DMMs quoted at the NBBO 43% of the time, DMMs represented 18% of the NYSE quote size at the NBBO, and 89% of DMM volume traded was liquidity providing (versus liquidity removing).
Additional NYSE DMMs include Bank of America Specialist, Kellogg Specialist Group and Spear, Leeds & Kellogg Specialists.
