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Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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November 8, 2005

NYSE Revises Hybrid Still Again

By Peter Chapman

The New York Stock Exchange, under pressure from institutional investors, has revised its controversial hybrid market proposal yet again.

The Big Board last month filed a sixth amendment to its hybrid plan with the Securities and Exchange Commission. In it, the Exchange modifies rules surrounding specialists' price improvement obligations and floor brokers' standing on the display book.

The New York Stock Exchange, under pressure from institutional investors, has revised its controversial hybrid market proposal yet again.

The Big Board last month filed a sixth amendment to its hybrid plan with the Securities and Exchange Commission. In it, the Exchange modifies rules surrounding specialists' price improvement obligations and floor brokers' standing on the display book.

Specifically, the changes limit a specialist's opportunities to "price improve" an order, or post a better quote on the book. This change was made partly in response to comments from the Investment Company Institute over the New York's fifth amendment to its hybrid plan, according to the Big Board.

The changes in Amendment Six also raise the status of certain orders posted on the book over and above that of floor brokers' hidden orders during a sweep.