Nyse Euronext (NYX) today announced that Barclays Capital, the investment banking division of Barclays Bank PLC , has agreed to acquire the portfolio of New York Stock Exchange Designated Market Maker (DMM ) assignments of Bear Wagner Specialists LLC, a subsidiary of J.P. Morgan.
The transition of DMM assignments from Bear Wagner to Barclays Capital is expected to occur in April 2009, subject to regulatory approvals and other customary terms and conditions, after which Barclays Capital will be the largest DMM on the NYSE, representing more than 850 NYSE-listed issues and approximately 28 percent of the NYSE's average daily trading volume. Following this addition, the Barclays Capital book will include seven components of the Dow Jones Industrial Average index, 25 components of the Standard & Poor's 100 Index and 109 components of the Standard & Poor's 500 index.
"The New York Stock Exchange is pleased by Barclays Capital's increased commitment to the new NYSE market model, and we will work with both firms and our listed issuers to ensure a seamless transition," said Larry Leibowitz, Group Executive Vice President, Head of U.S. Markets and Global Technology, NYSE Euronext. "Barclays Capital's growing investment in the NYSE market model reaffirms the NYSE's outstanding value to listed issuers and their investors as well as the financial community."
NYSE Designated Market Makers (DMMs)
After the acquisition of Bear Wagner Specialists' DMM assignments by Barclays Capital, the NYSE DMMs will be: Bank of America Specialist, Barclays Capital, Kellogg Specialist Group, LaBranche and Co. LLC, and Spear, Leeds & Kellogg Specialists.
The NYSE utilizes a unique combination of market professionals and technology to provide customers with the highest levels of market quality and competitiveness. DMMs are at the center of the NYSE market and have unique accountability for maintaining a fair and orderly market.
The NYSE features both a physical auction convened by DMMs and a completely automated auction that includes algorithmic quotes from DMMs and other participants. The role of the DMM succeeds that of the specialist, and is designed to increase quoting at the best price, while maintaining the obligigation to daampen volatility.