“We were reticent to do it at first, but after a lot of discussion and due diligence, we decided to go with NYSE Arca and are very pleased that we did,” said Jack Sennott, CFO of Darwin, a specialty liability insurer with a market cap of $320 million. The company is a subsidiary of Alleghany Corp. (Y).

Prior to the merger, growth companies like Darwin would have gone to competitors such as Nasdaq or the Amex, but now they don’t have to. NYSE Arca offers companies of Darwin's size and growth potential a new listing alternative, while giving them a chance to share in the cachet of the NYSE.

NYSE Arca, which trades an average of more than 800 million shares daily, lists 11 companies and is gaining traction as awareness of the new listing platform grows. Since the merger, two new companies have come on board and at least three are expected to list this month. In addition to Darwin's listing in May, NYSE Arca in June listed BFC Financial Corp. (BFF), a diversified holding company based in Fort Lauderdale.  Constellation Energy Resources, a Baltimore-based natural gas exploration company, is scheduled to list its $150 million IPO this month.

“We’re seeing a lot of momentum from companies,” said Bob Power, a vice president in NYSE Group’s Global Corporate Client Group who oversees new listings on NYSE Arca. “The tremendous brand name of the NYSE is a big plus. NYSE Arca offers an attractive option for growth companies that will eventually move to the NYSE and want to be part of the NYSE family.” Mr. Power said he is targeting both domestic and international companies.

Because NYSE Arca’s financial requirements for listing are not as stringent as the Big Board’s, NYSE Group can compete for a much larger slice of the listings market. Under a proposal to be filed with the Securities and Exchange Commission, companies seeking to list on Arca must have a minimum market cap of $100 million and a minimum share price of $4. Non-profitable R&D-stage companies can also list on NYSE Arca provided that they have sufficient capital on their balance sheet. In contrast, development-stage companies must have revenues of at least $75 million and a market cap of $750 million to list on the Big Board.

Prior to the merger, only 30 percent of companies going public in the United States qualified to list on the NYSE. Now with NYSE Arca, 60 percent to 65 percent of those companies qualify. In addition, NYSE Group will be an attractive destination for companies listed on other markets that want to move their listings.

Companies like BFC Financial, for example, which transferred from Nasdaq in June. “Because BFC Financial’s underlying holdings — BankAtlantic Bancorp (BBX) and Levitt Corporation (LEV) — are both listed on the Big Board, aligning our listing with them just made good common sense,” said Leo Hinkley, senior vice president of Investor Relations at BFC. “Further, from our experience, we anticipated BFC would benefit from the increased visibility associated with the NYSE.” 

Greater exposure is exactly what the company received. Even though the company has not yet had its bell ringing – it is scheduled for Sept. 28 — it received enormous press coverage as a result of a full-page ad NYSE Arca placed in The Wall Street Journal nationally. “We received a remarkable amount of phone calls and e-mail as a result of that ad,” said Mr. Hinkley. “I believe our visibility and ticker brand have been significantly enhanced since we made the move.”

Mr. Hinkley is looking forward to even more visibility when BFC rings The Opening Bell^SM . “Our experience with doing the bells with our other companies is that they are not only a first-class venue to generate and reinforce corporate awareness in North America, but they also trigger virtually immediate exposure worldwide.”

NYSE Group’s Mr. Power says that the strength of the NYSE brand and the visibility it offers are not the only benefits of an NYSE Arca listing. Another is Arca’s market quality and its enormous success in attracting trading volume. NYSE Arca trades 28 percent of all shares listed on Nasdaq and 14 percent of all listed shares. The greater the volume or shares traded, the more liquid or stronger Arca’s electronic market.

That, along with the designation of a lead market maker to all new NYSE Arca-listed companies, makes NYSE Arca an attractive listing venue. The lead market maker plays a similar role to that of the specialist on the NYSE trading floor, providing liquidity when needed and maintaining narrow spreads and fair and orderly markets.

“We’re very satisfied with the trading activity since we’ve moved to Arca,” said Mr. Hinkley of BFC Financial. “The marriage of electronic technology along with our lead market maker has provided very good liquidity and bid-ask spreads.”

Research from NYSE Group bears that out. An analysis performed in August demonstrated that since BFC’s transfer the average size of the stock’s inside quote increased from 356 to 506 shares, while its price volatility dropped dramatically. The analysis measured five-minute volatility, which shows how much the stock price fluctuated between price highs and lows every five minutes. Prior to its transfer to NYSE Arca, BFC’s stock price fluctuated 25 basis points. When it transferred, the volatility subsided to 12 basis points, a reduction of 52 percent. NYSE Arca provided equally exceptional market quality for Darwin, showing an average inside quote size of 704 shares. This compares favorably with industry peers listed on Nasdaq whose inside quote size averaged only 309 shares.

“Because we’re still majority owned by Alleghany, we have a bit of a thinly traded stock but the quality of those trades is fine,” said Darwin's Mr. Sennott. “We’re not finding many wild swings or unusual swings and certainly haven’t seen any hiccups.”

Darwin and BFC Financial also praised NYSE Group’s strong service orientation. “They’re completely focused on making you comfortable, walking you through the process, and making certain that they're delivering a high level of service,” said Mr. Sennott.        

As an additional incentive to list, NYSE Arca offers companies reduced listing fees. NYSE Arca, for instance, charges no initial listing fee to companies that transfer from another market. More recently, NYSE Group received approval from the SEC to waive initial listing fees for issuers moving to the NYSE from NYSE Arca, a key aspiration for NYSE Arca-listed companies.

“Our goal is to graduate to the Big Board at some point in the future,” said Mr. Hinkley.

Meanwhile, as executives dream of a Big Board listing, they get a chance to bask in the limelight of the NYSE brand. “The opportunity to come and trade the first shares on our IPO day and have our senior management team there, and then come back a second time for a bell ringing and a cocktail party afterward was, I can honestly say, one of the coolest days of my professional career,” said Mr. Sennott.

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About NYSE Group, Inc.
NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The NYSE is the world’s largest and most liquid cash equities exchange. The NYSE provides a reliable, orderly, liquid and efficient marketplace where investors buy and sell listed companies’ common stock and other securities. On June 30, 2006 , our listed operating companies represented a total global market capitalization of over $ 22.6 trillion. In the second quarter of 2006, on an average trading day, almost 1.8 billion shares, valued at over $68.5 billion, were traded on the NYSE.

NYSE Arca operates the first open, all-electronic stock exchange in the United States and has a leading position in trading exchange-traded funds and exchange-listed securities. NYSE Arca is also an exchange for trading equity options. NYSE Arca’s trading platform provides customers with fast electronic execution and open, direct and anonymous market access.

NYSE Regulation, an independent not-for-profit subsidiary, regulates member organizations through the enforcement of marketplace rules and federal securities laws. NYSE Regulation also ensures that companies listed on the NYSE and NYSE Arca meet their financial and corporate governance listing standards.

For more information on NYSE Group, go to www.nyse.com. Information contained on our Web site does not constitute a part of the prospectus relating to the proposed offering.

Cautionary Note Regarding Forward-Looking Statements
Certain statements in this article may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on NYSE Group’s current expectations and involve risks and uncertainties that could cause NYSE Group’s actual results to differ materially from those set forth in the statements. There can be no assurance that such expectations will prove to be correct. Actual results may differ materially from those expressed or implied in the forward-looking statements. Factors that could cause NYSE Group’s results to differ materially from current expectations include, but are not limited to:  NYSE Group’s ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed in NYSE Group’s Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and Exchange Commission. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Group that the projections will prove to be correct. We undertake no obligation to release any revisions to any forward-looking statements.