News Releases

 
NYSE Completes Hybrid Market Phase III Activation
--Phase IV Will Bring Advanced Order Routing Choices and Even Greater Speed--

NEW YORK, Jan. 24, 2007 – The New York Stock Exchange, a subsidiary of NYSE Group, Inc. (NYSE: NYX) today announced that all immediately eligible NYSE listed-securities are now trading on Phase III of the Hybrid Market platform.  This marks the completion of Phase III.  Phase IV of the NYSE’s Hybrid Market implementation plan will commence on Jan. 25, 2007

“The successful completion of Phase III, together with NYSE Arca, NYSE Group’s fully electronic trading platform, gives our customers more choices in trading NYSE-listed securities,” said Louis Pastina, Executive Vice President, NYSE Group, Inc.  “The results to date are very positive with respect to customer acceptance and market quality.

“Our customers are experiencing faster order executions, better fill rates, and superior market quality, which has always been a hallmark of the NYSE.  As quoted spreads have narrowed substantially, we continue to provide superior liquidity at the NYSE best bid and offer.  Sub-second, fully electronic order executions with the potential for price improvement now account for more than 90 percent of trades.  While effective spreads have widened slightly, we expect improvement with the addition of electronic tools for floor brokers and specialists that process price improvement messages electronically.”

Demonstrating the opportunity for customers to choose between an electronic or auction order execution in the NYSE Hybrid Market, 20% of share volume is currently handled through trading-floor brokers and specialists utilizing new Hybrid Market electronic tools.  This combination of order execution styles has resulted in improvements in the NYSE’s already impressive fill rates   (based on SEC Rule 605 statistics) and in quoted prices, as shown in the increase in setting or matching the National Best Bid or Offer (NBBO). The introduction of Liquidity Replenishment Points (LRPs) has ensured that volatility increased only slightly with the introduction of auto executions and sweeps without unduly slowing the market.   As defined by Regulation NMS, the NYSE Hybrid Market is considered fast nearly 99% of the time (on a time-weighted basis); (see accompanying chart for a summary of Hybrid Market Phase III results).

In Phase III, the NYSE began to automatically route orders to the best price if that price is not matched on the NYSE.  In Phase IV, the NYSE will introduce Immediate or Cancel (IOC) and Intermarket Sweep Orders (ISOs) that will not route, providing customers even more order execution choice and control.

In the upcoming year, the NYSE plans to further enhance Hybrid Market functionality with features such as the Common Customer Gateway, a consolidated point of entry for all cash equity services which will provide customers with multiple protocol choices.  In addition, the NYSE expects dramatic improvements in order throughput speed and turnaround times in 2007.

All NYSE listed securities have been connected to Phase III with the exception of 43 ten-share unit issues.  These securities, as listed on nyse.com, will be connected at a later date.                                                  

NYSE Hybrid Market Phase III Results To-Date

Phase III Hybrid Market Stocks

 

Pre-Hybrid

Since Hybrid

% Time Fast   

-

98.9 %

% Volume Auto-Ex

18.8 %

80.0 %

% Trades Auto-Ex

28.8 %

90.9 %

Quoted Spreads (bps)

20.95

18.32

Effective Spreads (bps)

7.50

8.17

Volatility (5 min / bps)1

11.33

12.12

Liquidity2

2,135

2,103

Fill Rates

66.9 %

76.2 %

% Time NBBO

86.8 %

87.6 %

Data above as of January 8, 2007 . Pre-Hybrid data based upon 30 day period prior to Phase III enablement.
1.  Volatility is defined as average trading range in a five minute period in basis points.
2.  Liquidity is defined as the number of shares available at the NYSE Best Bid and Offer
Source: NYSE Group

 

About NYSE Group, Inc
NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange LLC (the “NYSE”) and NYSE Arca, Inc. (formerly known as the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. In 2006, on an average trading day, 2.3 billion shares, valued at $86.8 billion, were traded on the exchanges of the NYSE Group.

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 December 31, 2006 , the operating companies listed on the NYSE represented a total global market capitalization of $25.0 trillion.

NYSE Arca, Inc. operates the former ArcaEx®, the first open, all-electronic stock exchange in the United States , which has a leading position in trading exchange-traded funds and exchange-listed securities. NYSE Arca, Inc. is also an exchange for trading equity options.  NYSE Arca, Inc.’s trading platforms provide 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.

Cautionary Note Regarding Forward-Looking Statements
Certain statements in this release 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. NYSE Group undertakes no obligation to release any revisions to any forward-looking statements.



Contact: Eric Ryan
Phone: 212.656.2411
Email:  eryan@nyse.com