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Tim Quast
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We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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August 31, 2001

Specialists to Get a Break

By Gregory Bresiger

Big Board Specialists would enjoy an advantage in how a company is listed under a proposed rule filed by the New York Stock Exchange with the Securities and Exchange Commission.

Under the rule, a prospective listing company would be able to recommend a particular specialist when the exchange's allocation committee is deciding on a specialist for the company's stock.

The company, under the proposed rule, would be able to inform the committee which specialist firm helped it decide to list on the NYSE. The issue of which specialist is selected is almost as old as the Big Board. It is also creating controversy. Some specialists have contended that they are shut out from selection by an old boys network.

Currently, a company planning to list on the NYSE has two methods of selecting which specialist can trade a company. It can have the Big Board's allocation committee find a specialist for it. The committee has a handful of specialists it uses. Secondly, the company can describe to the committee the kind of specialist it wants. However, it cannot name a specific firm.

With or without the rule, it could become easier for a specialist firm to make it into the committee pool because the number of specialist firms is declining. A spokesman for the NYSE declined comment.