US trade group, the Securities Industry Association, has criticised proposals by the New York Stock Exchange to create a hybrid electronic market, saying that the plans are "incomplete" and lack "important details and concrete examples of how the system will operate".
The Nyse's hybrid market proposal is seen as critical to the floor-based Exchange's plans to fend off competition from electronic order execution networks. Nyse claims that Direct+ will enable users to execute more of their orders quickly and electronically, with certainty and anonymity, while at the same time retaining elements of an auction market.
In its comment letter to the Securities and Exchange Commission, SIA says that Direct+ "is difficult to evaluate … without more information". It goes on to compare the market structure impact of Direct+ to Nasdaq's SuperMontage system, which required numerous amendments before getting the green light from regulators.
In particular, the SIA calls for greater clairification on specialist and floor broker trading, the mechanics of listing sweeps, order handling and interaction with the Intermarket Trading System and Regulation NMS proposal.