
Reg NMS won’t damage NYSE competitiveness, says boss
Daily news headlines
NEW YORK - The chief executive of the New York Stock Exchange (NYSE) has gone on the defensive against claims that the forthcoming Regulation National Market System (Reg NMS) directive will damage the exchange’s market share, and benefit competitors.
In an interview with the Financial Times, John Thain denied that Reg NMS, which will prioritise securing the best price available from all available markets as the key factor in the best execution of a trade, will disadvantage the NYSE over the NASDAQ.
“I don’t think Reg NMS poses any competitive issues for us, because it says you have to send orders to the market at the best price, and we have the best price 80% of the time,” said Thain.
His comments come in the wake of statements last week by Goldman Sachs analyst Joshua Carter, who changed his rating of NYSE stock from ‘neutral’ to ‘sell’, and shifted his NASDAQ recommendation from ‘neutral’ to ‘buy’. Carter claimed he based his decision on the superiority of the NASDAQ’s electronic execution platforms, and his belief that such technology will prove invaluable under the Reg NMS regime.
NYSE, on the other hand, is widely regarded as having dragged its feet over the issue of technology, and has been thought of as playing catch-up with the all-electronic NASDAQ for some time, although Thain claims the new Arca trading platform employed by the NYSE provides the highest available execution speed for those who need it.
Reg NMS came into effect in the US in March, one month later than planned, due to technical difficulties with trade executions at the NYSE. Broker-dealers are not obliged to fully comply with best execution requirements until July.
Carter’s comments had immediate effects – within 24 hours NYSE prices had slipped 5.5%, while NASDAQ shares climbed 3.2%, after he stated that the faster technology offered by the younger exchange would make it more attractive to brokers under the new regime.
Some investment banks and brokers have expressed hopes that Reg NMS will present an opportunity to end the dominance of the two exchanges in the US equities markets, while others have questioned whether it represents a further unnecessary burden to traders already beleaguered by regulation.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Grim repo warning spotlights BNP Paribas booking model
Federal regulators may be targeting French bank’s Paris-based book of US Treasuries
We’re all outliers now: Europe’s unflattering IRRBB test
Banks, fearing overreaction from supervisors, urge European Commission to reject NII-based assessment
SEC targets ‘dark magic’ in fixed-income pricing with Bloomberg fine
US regulator is going after pricing vendors that deviate from their published methodologies
Alameda’s mystery bank stake reignites Fed deposit debate
Crypto challenger Custodia accuses regulator of unlevel playing field over master accounts
More EU banks will fail new IRRBB test as rates push upwards
Half of all EU banks could cross outlier threshold for new test of net interest income
Finra head recognises ‘challenges’ for bond transparency drive
Cook says regulators thinking about industry’s operational and liquidity concerns
Why central banks shouldn’t ignore stablecoins
Rapid growth of stablecoins could impair monetary policy transmission
Hedge funds doubt tall tales around UK short-selling review
FCA has never used powers to ban short-selling, but reporting tweaks would be welcome