The New York Stock Exchange (Nyse) is gearing up to introduce new rules for floor specialists that will effectively end its hybrid model of open outcry and electronic trading.
According to press reports, the exchange has filed proposals with the US Securities Exchange Commission that will result in fewer privileges but more freedom for specialist floor traders.
Among the major changes proposed for specialists - which will be renamed "designated market makers" - will be the right to trade in options and other derivative securities for risk management purposes. Specialists will also be able to access new technology and trading experts from their particular firm.
But specialists will no longer be allowed to receive electronic orders before they are displayed publicly.
The exchange hopes to deploy the new rules later this year.
Reports say the new rules will effectively see an end to the so-called "hybrid" model the exchange launched in 2006, which combines fast on-screen dealing systems with traditional floor-based market-making. The hybrid platform automatically executes orders while allowing specialists to interact with Nyse's electronic order book and maintaining the floor auction system.
However Nyse's move to a hybrid market has forced many specialist firms to cut floor staff in response to increasing use of program trading. Last year brokerage Sanford Bernstein eliminating all floor staff at Nyse, while other firms including Bank of America, JPMorgan Chase, UBS, Van der Moolen, Lehman Brothers, Goldman Sachs and LaBranche & Co have all cut back on specialist staff since the exchange rolled out the hybrid platform.
The exchange has also closed down two of its four trading floors in the past two years in response to increased use of automated trading methods.
In a separate move Nyse Euronext has said that Credit Suisse's Crossfinder dark pool is the first so-called 'alternative trading system' available through its secure financial transaction infrastructure (SFTI) network.
"The Crossfinder ATS represents a significant addition to our growing suite of execution services and crossing networks available through SFTI," says Sam Johnson, EVP, Nyse Euronext, in a statement. "This is another significant step in our on-going mission to offer the industry's best and most active trading services and venues for our clients."