STA’s Toes on Market Performance and NYSE Floor Closure

It’s been a turbulent time for the stock market.

Whether one looks at the systems, exchanges and/or staffing, it has been a unique and interesting time. But one thing is for sure, the systems and markets are functioning as expected.

Jim Toes, STA

Jim Toes, Chairman and CEO of the Securities Traders Association told Traders Magazine in an interview Friday afternoon that the market has indeed performed in line with expectations – orderly and without hiccup – despite increased volatility and order activity.

“I feel that many of the painful lessons learned in the past from the financial meltdown in 2008, 9/11, Superstorm Sandy and others have been absorbed and learned from,” Toes said in an interview. “You can see the pockets and times when the market has responded where the industry has learned from these lessons during its response to this crisis.”

Given the markets resiliency and performance, maintaining liquidity for investors and price discovery, Toes added that little should be done now to alter the markets operation. Some pundits have suggested that the market circuit breakers should be altered given the recent extreme vacillations price movements as cause for an adjustment or implementation of price bands. Toes said no.

“We’re of the opinion that we should keep the markets open and rules consistent for the time being,” Toes said. “There’ll be a post-mortem of how things performed and we can discussed around that later. But not now.”

One thing the market will likely examine in the future is the landmark decision by the New York Stock Exchange to close its physical trading floor after today’s (Friday, March 20) close and go fully electronic on Monday, March 23 – from open to close. Toes said it was of particular importance for individuals to  take responsibility to understand how Monday’s unique trading session will function.

“Firms and individuals need to understand how Monday is going to be different than other Mondays. The NYSE moving to an all-electronic format for the open and close need to understand it will be different. The NYSE has done a good job testing and communicating how this will get done.”

Toes told Traders Magazine that the NYSE held phone calls and conference calls to explain how Monday will work – in particular the closing auction- and responded to caller questions. He added that the exchange plans to issue a formal list of Frequently Asked Questions to the public and have an additional test on Saturday to explain the nuances how this e-trade platform will operate.

“The NYSE had a call on Thursday; it was well organized and informative,” Toes recounted. “They published a five-page document on how the market would work on Monday. They then entertained as many questions as time allowed to address concerns. Anybody who listened to this call and the Superstorm Sandy phone call will see last night was a dramatic improvement. It is imperative for people to understand how the closing auction is going to go. You have to understand the nuanced differences between a normal closing auction and the new Monday one.”

As per the NYSE website, here is the list of FAQs