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NYSE Approves Expansion of Automatic Trading - Exchange Will Propose to Broaden Access To Speed And Certainty Of NYSE Direct+®

Date 05/02/2004

The New York Stock Exchange Board of Directors today approved the expansion of access to automatic trading at the Exchange.

“Consistent with the requests of many of our customers, we plan to make the speed and execution certainty of our NYSE Direct+® automatic-execution service available to a wider range of investors,” said NYSE Chief Executive Officer John A. Thain. “Our goal is to continue offering investors the best price as well as the most compelling array of order-execution choices. Only the NYSE provides this blend of market models, from completely automated to high value-added.”

Mr. Thain added: “Our commitment to create the best price for investors remains paramount. Today’s initiative complements market-structure rules that ensure investors in NYSE-listed stocks receive best-price trade executions. We will work to keep those rules in place.”

Specifically, the board approved eliminating two of the trading restrictions in the current rules – the 30-second limitation for consecutive orders and the 1,099-share size limit for orders – and the addition of market orders to those eligible to trade via NYSE Direct+ (currently, only limit orders are eligible).

The proposal will be filed tomorrow with the Securities and Exchange Commission. Following approval, the changes would be implemented in phases to ensure that the NYSE and order-routing vendors can make necessary technology changes for each step, and so that the Exchange can evaluate the initiative at each stage and make any changes that are appropriate. As currently planned, the steps would be as follows:

  1. Elimination of the 30-second limit for NYSE Direct+ orders entered for an account in which the same person is directly or indirectly interested (under current rules, only one NYSE Direct + order can be entered for the same customer per 30-second interval).
  2. Elimination of the 1,099-share size restriction for NYSE Direct+ orders.
  3. Addition of market orders to the type of orders eligible for NYSE Direct+.
  • NYSE Direct+® currently provides optional automatic execution of limit orders up to 1,099 shares at the best bid or offer.The average execution time is 1 second.
  • Begun as a pilot in December 2000 and fully implemented in April 2001, NYSE Direct+ today executes 7 percent of consolidated volume in NYSE-listed equities – more than that executed by all electronic communications networks combined.
  • Since 2002, the number of NYSE Direct+ orders has increased 140 percent, the number of trades by 151 percent, and share volume by 111 percent.
  • The NYSE posts the best price of any market for NYSE-listed equities 93 percent of the time.The Exchange also has the highest fill rate – the percentage of received orders executed – of any market for NYSE-listed equities.
  • More than