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May 25, 2007

Moving On Up-Stairs

By Michael Scotti

Call it a sign of the times at the New York Stock Exchange. As trading on the floor dries up, the ranks of independent floor brokers continue to shrink. Last month, six key employees at NYSE floor broker Doyle Miles & Co. shuttered their operation and joined W.J. Bonfanti.

It was a good move for both firms, according to Craig Rothfeld, executive director at Bonfanti, an agency broker with trading operations both upstairs and on the NYSE floor.

Doyle Miles found the move attractive because it did not have an upstairs presence, Rothfeld said. And as more liquidity disperses away from the central marketplace, it's easier to access it from upstairs desks. Meanwhile, Bonfanti adds a new set of institutional clients with little additional overhead. Two of the sales traders-Jack Miles and Dan Munro-will move upstairs. Bonfanti now employs 44 people, most involved in the trading operation. Not all firms are convinced it will be necessary to move off the floor to access liquidity in NYSE-listed securities.

One floor brokerage firm with a large institutional following and deep pockets told Traders Magazine that it could move upstairs if necessary, but it does not see such a move providing a comparative advantage at this time. A sales trader at the firm said if he moves upstairs, he'd be one of 40 brokers for a client, but on the floor, he's often a client's only call. "I want to be their upstairs trader on the floor of the NYSE," he said.