NYSE Euronext will cut some transaction costs and shrink the trading floor at the New York Stock Exchange to the size last seen in 1969 after its share of the U.S. equity market dropped to a record low, Bloomberg reports.
Brokerages will be able to execute some trades at the Big Board at no cost and will receive higher payments for sending orders to the NYSE Arca electronic market, the New York-based company said in a statement today. The exchange will close two of its four remaining rooms as increased automation allows brokerages to process more shares with fewer floor traders.
While NYSE Euronext President Duncan Niederauer has created incentives to lure trades back to the exchange, the NYSE’s market share fell to an all-time low of 42.7 percent in July after losing almost 7 percentage points since 2004. Chief Executive Officer John Thain in April hired Niederauer, a former colleague at Goldman Sachs Group Inc., to recover lost business.
“This is doing whatever they can in the hope they can retain a certain level of market share,” says Sang Lee, a managing partner at Aite Group LLC, a Boston-based consultant to brokerages and institutional investors. “We will continue to see downward pressure on pricing levels. When everybody is fighting for market share the first thing that gets hit is pricing.”