Under Pressure, the NYSE Moves Online

FRAMINGHAM (03/24/2000) - The New York Stock Exchange Inc. plans to begin offering limited Internet access to its broker members and some of their customers by late April.

It's a big move for the more than 2-centuries-old stock exchange, which is under increasing pressure from all-electronic trading networks. While 90 percent of the NYSE's trades are tracked electronically, 10 percent are not.

To make the exchange more competitive, the NYSE has invested millions in new technology, pushing the company into the red in the fourth quarter by $800,000 - its first quarterly loss since 1991.

Common Access Point, the first part of the NYSE's new electronic initiative, is a $15 million extranet that will let brokers use industrywide standards - TCP/IP and Financial Information Exchange (FIX) - to communicate with the exchange, rather than rely on the proprietary systems and order forms currently used.

Also planned for next month is the rollout of Institutional XPress, which the NYSE will use to send out bulletins and information about stocks, explained Santo Famularo, the NYSE's vice president of infrastructure technology.

Capacity shouldn't be a problem, said Famularo, because customers won't be able to use the system interactively to request more quotes.

In July, the NYSE plans to implement financial industry standards-based communications for the Common Message Switch, which is used to send electronic orders to the NYSE point of sale.

Then, in the fall, the NYSE expects to capture the final 10 percent of trades that aren't being tracked electronically with its new Front End Systemic Capture program, which still needs approval from the Securities and Exchange Commission.

Despite the changes, Famularo said, the NYSE has no plans to eliminate the floor.

"In our vision, the trading floor continues to be the main mechanism for the exchange," he said.

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