Another NYSE firm quits floor trading

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The Independent Online

Another of the New York Stock Exchange's specialist trading firms said it was shutting down its floor trading business – the second such announcement in two days, and a further sign of the withering of the historically bustling exchange floor.

The Dutch firm Van der Moolen said its NYSE floor trading operations had pushed its US business €11.3m (£8.1m) into the red in the first nine months of the year, hit by the introduction of electronic trading on the NYSE. The outgoing NYSE chief executive, John Thain, oversaw the introduction of a new hybrid system that allowed investors to bypass the specialists on the trading floor by connecting directly via the exchange's computers.

Richard den Drijver, Van der Moolen's chief executive, said its specialist operations had "not succeeded in bringing its operations back to profitability and will not be able to meet its second half year US target. Therefore, we have decided to terminate the activity as promptly as possible. We consider this activity not to be of a strategic nature any more".

Every stock listed on the NYSE is assigned a specialist, which is responsible for finding buyers and sellers, and NYSE executives were working yesterday to reassign the stocks traded by Van der Moolen and by SIG Specialists, whose parent company Susquehanna said it was pulling out on Wednesday. The twin defections leave just five remaining specialist firms, and even these have laid off staff since the introduction of electronic trading.

The NYSE is planning to shut two of the overflow rooms of its historic trading floor, shrinking it back to the size it was 40 years ago. When the exchange first expanded beyond the two rooms that now remain, it handled an average of 8 million shares a day, compared with more than 1.6 billion today, but fewer traders are needed to handle the extra volume and some doom-mongers predict the eventual closure of the floor.

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