The pilot, which is being rolled out to a group of 168 securities a few at a time, will enable members and member firms to gain essential practical experience with the new systems and processes in a controlled and well-modulated way. Among the new features in the Phase I pilot:
- NYSE e-QuoteSM, a new tool for floor brokers to represent customer orders efficiently and effectively in both the automated and floor-based auction components of the Hybrid Market. e-Quote is an electronic method for floor brokers to place interest on the NYSE Display Book®, the order-management system for specialists. Floor brokers in the trading crowd enter e-Quote bids and offers at various prices via hand-held devices.
- NYSE s-QuoteSM, an electronic representation of a specialist’s trading interest, which can be either manually entered into the Display Book or algorithmically entered. During the pilot, only manual entry will be permitted. s-Quote enables specialists to quickly react to market activity to add depth, tighten spreads, dampen volatility and provide opportunities for price improvement and single-price executions.
- Automated application of NYSE rules and regulations concerning priority, parity and yielding. These rules govern the handling, allocation and sequencing of order executions among multiple participants and historically have been applied manually by specialists.
“The Hybrid Market will offer greater choice to customers who want to trade electronically, instantaneously and anonymously, while maintaining the benefits of our auction market,” said NYSE CEO John A. Thain. “The pilot is a small but important step toward creating a next-generation market that offers our customers the widest range of choices to access the world’s largest and deepest pool of liquidity.”
The pilot began yesterday and will last 90 days or until the SEC approves the NYSE’s Hybrid Market proposal, whichever comes first. Additional phases of the Hybrid roll-out will be announced in early 2006.
