The New York Stock Exchange has begun the rollout of a pilot program to introduce the first phase of its hybrid market, a new market model designed to give customers the broadest choice of trade-execution preferences.
The pilot is being rolled out to a group of 168 securities a few at a time, which the exchange says 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 the hybrid market will see implemented is e-Quote, an electronic method for floor brokers to place interest on the NYSE Display Book, the order-management system for specialists.
Additional functions are enabled through s-QuoteSM, an electronic representation of a specialist’s trading interest. 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.
The pilot will operate under the automated application of NYSE rules and regulations concerning priority, parity and yielding.
NYSE CEO John Thain said, 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.
The pilot will last 90 days or until the SEC approves the NYSE’s hybrid market proposal, whichever comes first. The exchange will announce additional phases of the hybrid roll-out in early 2006.