An uncommon group of stock market participants joined forces earlier this month to remind the world, particularly the Securities and Exchange Commission, about the inequalities of an auction-based stock market such as the New York Stock Exchange.
On Oct. 7, Ameritrade Holding Corp., Archipelago Exchange, Bloomberg Tradebook LLC, Fidelity Investments, Instinet Group Inc., Nasdaq and the National Stock Exchange ran a full-page ad in the Wall Street Journal headlined "It's Time For Fair and Modern Markets." The sub-headline: "Here's the case for greater competition."
In the ad, the group says "archaic" regulations have allowed the NYSE's floor-based trading system "to impose additional costs on the nation's investors and to block the emergence of competitive alternatives." They also say the SEC is close to issuing new rules on modernizing stock markets, a reference to Regulation NMS.
"The benefits of forcing the NYSE to compete fairly with these electronic markets are not just academic," the group says. "We believe that introducing competition to the current archaic floor-based markets will reduce investor trading costs."