Understanding the NYSE

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Introduction

The effects of the global financial crisis of 2007/8 brought to light the increased risks and

recklessness on the part of financial intermediaries and in some cases, financial institutions. The

public, who are form a core of consumers in the financial industry, were left with wasted

investments. Investments banks run up to their respective banks looking for cash injections.

Others such as the AIG who insured the bulk of the toxic assets placed the investments of their

beneficiaries to jeopardy. With the increased occurrence of credit crunch, that was blamed and

viewed as largely man-made, renewed calls from both public and governments for financial

securities regulators to weigh in on the practices of the intermediaries in the industry.

To this end, the International Organization for Securities Commission weighed in on its

members to develop and enforce regulations that would mitigate such volatile risks the industry.

Whereas individual members may have actually taken such measures from the early 90s, a

majority of the commissions were slow in acting and thus the difference in the impact of the

GFC on the respective trading houses. As such, the ensuring discussion seeks look into the

affairs of the New York Stock Exchange (NYSE) whereby effort will be made to discern its

structure, operations and trading companies. The reason behind the selection is largely based on

the reverence of exchange house.

NYSE

The NYSE opened its trading floor on 17 May 1792 where it currently resides at 11 Wall

Street in Manhattan New York; it centuries old presence has made its address synonymous to the

US financial trading industry. It first began trading with 245 stock brokers who later on went to

form the New York Stock and Exchange Board with Anthony Stockholm as its first president.
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Their initial trading house was at a rented room but later moved to 10-12 Broad Street and soon

occupied their current location in 1922.

The exchange house trades from Monday to Friday between the hours of 9.30 am and

4.00 pm save for public holidays. Within its trading floor, it provides a platform for continuous

trading and where brokers may transact on behalf of their clients. The facility is also renowned

for its use of technology such as its electronic Hybrid Market that allowed its stocks to be traded

on as from 2007. Moreover, it also has the Super Book that basically contains all the order of all

liquidities. To facilitate all these, the facility charges fees for a number its services such as

remote access and use of softwares. Suffice to say that prices are determined on the basis of

supply and demand that is funneled through a single location thus ensuring that all manner of

stocks are presented to a wide base of traders.

Company Analysis

Nike

Royal Dutch Shell

Coca – Cola

NYSE Market Trends

Reforms at NYSE

In examining the level of reforms that the NYSE have undertaken, there is need to take

into account the three levels of reforms. Firstly, there are the industry reforms that have been
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necessitated by the federal government that essentially affect a number of intermediaries

including investments banks. Secondly, there are those that were pushed for by the Securities and

Exchange Commission that essentially functions as the direct regulator for all the trading

activities within the NYSE. Lastly, there are those that have been initiated by the NYSE Board

on behalf of the members of the house.

Challenges

Opportunities

References