Nyse begins trials of new hybrid market

Nyse begins trials of new hybrid market

The New York Stock Exchange has begun pilot trials of its proposed hybrid market, which aims to combine fast on-screen dealing systems with traditional floor-based market-making.

In a memo, the exchange says the pilot will allow members and member organisations to gain "essential practical experience with new systems and processes in a controlled and well-modulated way".

In addition, continues the Nyse memo, the pilot will contribute to the exchange's ability to comply with the implementation date for Regulation NMS, which mandates for faster electronic price discovery.

To ensure that the pilot goes as smoothly as possible, it will be rolled out initially to a few securities at a time, with clear signposting on the trading floor.

During the trial, the exchange's Direct+ electronic trading platform will continue to operate under existing rules and be subject to the same availability.

Among the new hybrid functions to be implemented are the floor broker agency interest files - known as e-quotes - which provide a vehicle for delivering price improvements and floor broker experience in an electronic market.

The trial will last for 90 days, or until the Securities and Exchange Commission approves the Nyse's hybrid market filings, whichever comes first. The exchange filed a plan for the Hybrid market in August 2004.

In October, the American Stock Exchange filed plans with the SEC for implementing it's own hybrid trading structure.

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