WSJ: 'NYSE Plans to Revise Specialist-Trader Rules'

By: Ray Pellecchia

File Under: NYSE

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OK, I know it's early, but you've been waiting for a headline like that for a long time, so I wasn't going to sit on it. From today's Wall Street Journal: NYSE Plans to Revise Specialist-Trader Rules. Excerpt:

The New York Stock Exchange is planning to unveil a series of proposed new rules Friday in an effort to turn around its falling market share. ...

...Now, NYSE is essentially proposing to end the hybrid model and replace it with new rules that give the specialists less privileges, but more freedoms, in the way they trade.

Specialists would be called "designated market makers" under the new rules, and would no longer be able to have their computer algorithms receive electronic orders before their display publicly.

"The current system doesn't work very well," says Lawrence Leibowitz, head of U.S. markets at NYSE. "This positions the specialist to actually add value in the market again." The proposed changes require Securities and Exchange Commission approval, but Mr. Leibowitz hopes they can be completed by the end of September.

The move is an acknowledgment that many customers prefer speedy trading without the presence of an intermediary, and that the intermediaries could trade more effectively if they were able to pick their spots more carefully.

Much more information to follow on this later today.

Happy Friday the 13th, folks. William Butler Yeats was born On This Day (NYTimes.com) in 1865 (died 1939). From the great man's "The Second Coming":

Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned.
The best lack all conviction, while the worst
Are full of passionate intensity.