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May 9, 2008

NYSE Looks To Expand Floor Role

By Peter Chapman

The New York Stock Exchange, reacting to a decline in the number of floor traders, is proposing that exchange employees be allowed to act as floor officials.

The exchange asked the Securities and Exchange Commission for permission to alter its Rule 46, which restricts the role of floor official to exchange members. Under an amendment to the rule, "qualified exchange employees" would be permitted to function as floor officials and governors along with members.

"As the NYSE's trading floor has downsized from five trading rooms to two," the exchange told the SEC in a filing, "a number of highly experienced members have left the floor as a result of retirement, layoffs and restructurings within their member organizations."

The exchange has hired "several" former floor traders, it says, who would be well suited to function as floor officials in unusual situations.

Floor officials supervise and regulate openings and unusual situations. They also review and approve certain trading activities such as wide price gaps, delayed openings and trading halts.

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