Amex Begins Transformation
Traders Magazine Online News, October 16, 2008
The American Stock Exchange will soon start to look and function much like the New York Stock Exchange.
The Amex, soon to be known as NYSE Alternext U.S., following its acquisition by NYSE Euronext on Oct. 1, will shed its old technology and market model and adopt those of the NYSE.
Oscar Onyema, Amex's chief administrative officer, speaking at the Security Traders Association annual conference in Boca Raton, Fla., today, said he expects equity trading under the new format to commence on Dec. 1. On the options side, trading will begin under the new structure in February. Eventually, all trading will take place at NYSE headquarters at 11 Broad Street.
"We are very excited about the merger with NYSE Euronext," Onyema told the gathering of trading executives.
The entire organization is to be renamed NYSE Alternext U.S., while the equities group will be known simply as NYSE Alternext. The options group is to be called NYSE Amex Options.
Gone are memberships. Traders will access the market for small caps via trading permits. Gone are specialists. They will be called designated market makers and function like those of the NYSE, assuming the Securities and Exchange Commission approves the NYSE's plan.
Pricing will change as will the rule book. Most rules will mirror those of the NYSE, with a few exceptions, such as capital requirements for market makers.
The exchange is offering broker-dealers four testing opportunities (one was Oct. 11) for their order-entry systems to determine if they can receive auto responses and can tell the difference between Amex and NYSE stocks.
Brokers will have to be able to accept CCG and FCS FIX message communication protocols. The Amex FIX version will be discontinued.
Onyema also said the reborn exchange will be able to provide "more transparency" by offering data feeds similar to the NYSE's OpenBook Ultra real-time messaging service.
"We will be able to offer more reliable technology," the exec said. By most accounts, current Amex technology is outmoded.
Amex will also offer sub-penny pricing, assuming SEC approval, Onyema added.
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