Because of damage to the New York Stock Exchange’s telecom infrastructure caused by Hurricane Sandy, floor brokers have seen a drop-off in business. To ease their pain, NYSE is reducing their annual license and telecom fees, according to a regulatory filing from last week.
The exchange is giving member organizations credits against their annual license and telecom fees for the months of November and December. NYSE will pay brokerages $2,000 for each of their first two licenses and $500 for any additional license for each of the two months. It will also waive their $33.33 monthly telecom bills for those months.
The exchange has about 200 members, but not all employ brokers on the floor. An exchange official could not immediately confirm how many licenses would be eligible for the credits. Brokerages pay the exchange $40,000 per year for their first two licenses and $25,000 for each additional license. They pay the exchange $400 per year for telecom services.
Behind the move is a loss of business by brokers due to telecom difficulties caused by flooding from Hurricane Sandy on October 29. Ever since the storm walloped the New York region, lower Manhattan has not had fully functioning telephone service. Verizon, the area’s main carrier, has been steadily rebuilding the infrastructure with fiber optic cable, but has yet to finish.
Floor broker telephone lines are “not fully operational and may not be so for at least another month, and possibly longer,” the NYSE told the Securities and Exchange Commission in the filing. The telecom problems, which include limited Internet service, have led to a decline in business for floor brokers, NYSE added.
To make it possible for floor brokers to communicate with their customers, the NYSE, last month, permitted them to use their personal cell phones.