From: Junius W. Peake
Comments on SR-NYSE 2006-98
The New York Stock Exchange ("NYSE") has always prided itself on claiming to be a fair, open auction market with full disclosure.
It seems disingenuous for them to set a fixed price for trading licenses for 2007 (even higher than the 2006 auction price) when it is more than a little obvious that the value of a floor trading license has been diminished because of the merger with Arca.
Newspaper reports have made it clear that many firms have reduced their presence on the floor, since a large percentage of orders are executed without human intervention. This attrition will surely continue apace, especially when the February implementation of the trade-through rule of Reg NMS is required. This seems like déjà vu all over again, and a reminder of the NYSE's insistance on fixed minimum commission rates that took nearly 200 years to overturn.
The NYSE is not just a private company offering its products or services for sale. It is a major player—regulated by the Commission—which, because of its market share, puts it into a quasi-monopolistic position.
The Commission should disapprove this anticompetitive proposal and require that the 2007 trading licenses be sold by an auction system, as was done last year.
Very truly yours,
Junius W. Peake