From the press release, issued earlier today:

NYSE Arca Equities Fee Schedule Reductions
In Nasdaq-listed (Tape C) securities (including ETFs), the new NYSE Arca equities fee schedule provides for increased rebates, decreased “take” fees and reduced routing fees for large liquidity providers based on monthly average daily share volumes. In particular:

· A rebate of $0.0026 per share for orders that provide liquidity and a fee of $0.00245 per share for orders that take liquidity will apply for customers who transact average daily share volume per month greater than 60 million shares in total, including the provision of liquidity of more than 30 million average daily shares. The routing fee for orders that meet this volume threshold will be $0.0026 per share for orders routed away and executed by another market center or participant.

· A rebate of $0.0025 per share for orders that provide liquidity and a fee of $0.0026 per share for orders that take liquidity will apply for customers who transact average daily share volume per month greater than 30 million shares in total, including the provision of liquidity of more than 15 million average daily shares. The routing fee for orders that meet this volume threshold will be $0.0026 per share for orders routed away and executed by another market center or participant.

· All other customers will receive a rebate of $0.0020 per share for orders that provide liquidity, a fee of $0.0026 per share for orders that take liquidity, and a routing fee of $0.0035 per share for orders routed away and executed by another market center or participant.

For NYSE-listed (Tape A) securities, the new NYSE Arca equities fee schedule introduces an increased rebate of $0.0028 per share for orders that provide liquidity if the liquidity provider transacts an average daily share of providing volume per month greater than 30 million on NYSE Arca.

Pricing remains unchanged on the New York Stock Exchange (NYSE) in NYSE-listed securities (Tape A) and for trading in all Tape B securities (including ETFs). The NYSE continues to offer the most attractive take fee in NYSE-listed securities of $0.0008 per share for all customers.
Firms interested in advertising quotes in their own names can do so using NYSE Arca’s attribution capability, which is available through major vendors and service bureaus such as Fidessa, Lava Trading and SunGard BRASS.

NYSE Arca Option Fee Schedule Reductions
NYSE Arca Options will modify the “post/take” fee structure for electronic executions in all penny pilot issues, effectively lowering the “take” fee for all customers as well as providing a higher market maker rebate on incremental volume above certain liquidity provision levels.

NYSE Arca Options will reduce the liquidity “take” rate from $0.50 to $0.45 per contract for all market participants. The NYSE Arca trading system will automatically route orders to other exchanges if the national best bid and offer (NBBO) is not available on NYSE Arca. Routed orders executed at other exchanges will only be charged the reduced $0.45 “take” rate per contract. NYSE Arca Options provides a powerful combination with the lowest take fee together with deep liquidity and private smart-order routing capabilities that bring faster executions and fulfill best execution obligations.

NYSE Arca Options will provide additional incentives to NYSE Arca Market Makers for posting immediate or ultimately executed liquidity. Market Makers that achieve specific thresholds for posted, executed volume in penny pilot issues will receive additional credits.
Execution type Rebate per contract for posting “Take/Route” fee per contract
Customer $0.25 $0.45
Broker Dealer $0.25 $0.45
Market Maker $0.30 $0.45
Market Maker $0.31 for incremental volume over 1 million contracts/month $0.45
Market Maker $0.35 for incremental volume over 5 million contracts/month $0.45

Hope that’s a bit of good news on a day when the Yanks’ Opening Day got rained out until tomorrow. Was going to watch it in my office today and had to work instead. Can you imagine?

Today in NYSE History
31 Mar 1910 — The NYSE’s Unlisted Securities Department was abolished and its stocks - mostly industrial companies - were transferred to the regular list.

From the press release, issued earlier today:

NYSE Arca Equities Fee Schedule Reductions
In Nasdaq-listed (Tape C) securities (including ETFs), the new NYSE Arca equities fee schedule provides for increased rebates, decreased “take” fees and reduced routing fees for large liquidity providers based on monthly average daily share volumes. In particular:

· A rebate of $0.0026 per share for orders that provide liquidity and a fee of $0.00245 per share for orders that take liquidity will apply for customers who transact average daily share volume per month greater than 60 million shares in total, including the provision of liquidity of more than 30 million average daily shares. The routing fee for orders that meet this volume threshold will be $0.0026 per share for orders routed away and executed by another market center or participant.

· A rebate of $0.0025 per share for orders that provide liquidity and a fee of $0.0026 per share for orders that take liquidity will apply for customers who transact average daily share volume per month greater than 30 million shares in total, including the provision of liquidity of more than 15 million average daily shares. The routing fee for orders that meet this volume threshold will be $0.0026 per share for orders routed away and executed by another market center or participant.

· All other customers will receive a rebate of $0.0020 per share for orders that provide liquidity, a fee of $0.0026 per share for orders that take liquidity, and a routing fee of $0.0035 per share for orders routed away and executed by another market center or participant.

For NYSE-listed (Tape A) securities, the new NYSE Arca equities fee schedule introduces an increased rebate of $0.0028 per share for orders that provide liquidity if the liquidity provider transacts an average daily share of providing volume per month greater than 30 million on NYSE Arca.

Pricing remains unchanged on the New York Stock Exchange (NYSE) in NYSE-listed securities (Tape A) and for trading in all Tape B securities (including ETFs). The NYSE continues to offer the most attractive take fee in NYSE-listed securities of $0.0008 per share for all customers.
Firms interested in advertising quotes in their own names can do so using NYSE Arca’s attribution capability, which is available through major vendors and service bureaus such as Fidessa, Lava Trading and SunGard BRASS.

NYSE Arca Option Fee Schedule Reductions
NYSE Arca Options will modify the “post/take” fee structure for electronic executions in all penny pilot issues, effectively lowering the “take” fee for all customers as well as providing a higher market maker rebate on incremental volume above certain liquidity provision levels.

NYSE Arca Options will reduce the liquidity “take” rate from $0.50 to $0.45 per contract for all market participants. The NYSE Arca trading system will automatically route orders to other exchanges if the national best bid and offer (NBBO) is not available on NYSE Arca. Routed orders executed at other exchanges will only be charged the reduced $0.45 “take” rate per contract. NYSE Arca Options provides a powerful combination with the lowest take fee together with deep liquidity and private smart-order routing capabilities that bring faster executions and fulfill best execution obligations.

NYSE Arca Options will provide additional incentives to NYSE Arca Market Makers for posting immediate or ultimately executed liquidity. Market Makers that achieve specific thresholds for posted, executed volume in penny pilot issues will receive additional credits.
Execution type Rebate per contract for posting “Take/Route” fee per contract
Customer $0.25 $0.45
Broker Dealer $0.25 $0.45
Market Maker $0.30 $0.45
Market Maker $0.31 for incremental volume over 1 million contracts/month $0.45
Market Maker $0.35 for incremental volume over 5 million contracts/month $0.45

Hope that’s a bit of good news on a day when the Yanks’ Opening Day got rained out until tomorrow. Was going to watch it in my office today and had to work instead. Can you imagine?

Today in NYSE History
31 Mar 1910 — The NYSE’s Unlisted Securities Department was abolished and its stocks - mostly industrial companies - were transferred to the regular list.

News is just out that in response to customer interest, the New York Stock Exchange plans to introduce in the coming months two types of Reserve Orders for electronic entry. Excerpt from the news release:

“This is about providing our customers with greater choice and flexibility in how they access our market,” said Lawrence Leibowitz, Executive Vice President, U.S. Markets and Global Technology. “We’re continuing to advance the NYSE market model by focusing on our clients’ interests and developing new solutions such as Reserve Orders to serve their needs.”

Choice and flexibility are getting to be the major themes here, as well they should. The more traders I meet — via the blog or in person — the more I see that their interests and needs are incredibly diverse, which makes more important our approach: providing a broad range of ways to find and access liquidity.

Here are the Reserve Order information sheet, 100-stock pilot list, and the technical specification.

I’ll keep you posted on this as we head toward launch, as well as any other market developments. In the meantime, happy Friday. My on-call jury duty is over — a total non-event. Hope you have a great weekend. A little trivia before you go back to whatever you were doing:

Today in NYSE History
28 Mar 1985 — Ronald Reagan became the first U.S. president to visit the NYSE while in office.

That must have been something to see. Sorry I got here too late to catch that one.

Also, August A. Busch, Jr. was born on this day in 1899 (died 1989). His NY Times obit nicely recounts the life of a great marketer who built his family business into the world’s largest brewery. Worth reading, so you can think of him next time buy a share of BUD or hoist a Bud. (Speaking of liquidity.)

Neither is a household name outside the Exchange community (at least not yet; apologies, Dick and Gordon!) but nonetheless, this is interesting news: Rosenblatt Securities Hires Wall Street Veteran Gordon Charlop To Head NYSE Floor Operations - Move Is Continuation Of Firm’s Contrarian Bet (Mondo Visione) Excerpt:

Rosenblatt Securities is pleased to announce that it has hired Gordon Charlop as Managing Director in charge of the firm’s New York Stock Exchange floor operations.

Charlop, formerly president and CEO of agency brokerage WJ Dowd, will oversee a floor staff that has grown during the past two years from six to nine people. Rosenblatt’s move stands in contrast to the actions of many other brokerages, especially the big global players that traditionally have provided the bulk of the NYSE’s order flow, which have cut their floor staffs significantly. Rosenblatt views these moves as overreactions. Over the past five years the firm has diversified from its roots as an independent floor brokerage and now derives the vast majority of its revenues from upstairs trading and other businesses, but it firmly believes that the ability to represent customer orders on the NYSE floor, which still commands nearly 40% market share in Big Board-listed stocks, remains an essential tool for achieving best execution.

“We believe it’s important to represent our clients wherever the liquidity they need resides, whether it be in the various electronic markets to which we connect or on the NYSE floor,” said Dick Rosenblatt, Founder and CEO of Rosenblatt Securities and an NYSE Executive Floor Governor. “The management of the exchange is committed to maximizing the strategic value of the floor, and by expanding our floor presence, especially now with Gordon’s leadership, we believe we will be well positioned for coming changes to the NYSE’s market structure aimed at stabilizing and reclaiming lost market share.”

Gordon started his career as a clerk on the Amex floor, and has been an active participant in NYSE broker committees focused on trading technoloogy. These days, you sometimes see him interviewed by Mark Haines and Erin Burnett on CNBC’s “Squawk Box.” I see his hiring as another validation of the idea that participation on the NYSE trading floor can be a contributing component of a firm’s diversified approach to trading.

I also know him as a fellow Yankees fan who knows how to conduct a first-class baseball argument. Over the course of months.

Seriously, congratulations to Dick and Gordon.

Changing subjects, your humble blogger may be somebody’s humble juror this week; I’ve been snagged for jury duty. Posting here will be light, unless I can work some in while waiting for my number to be called, as I’m doing now. Have a great week, my friends.

Today in NYSE History
24 March, 1942 — For the second time in history, the NYSE recommended the purchase of a specific security - War Savings Bonds. The first recommendation, embracing Liberty Bonds, was made during World War I.

Interesting article by Larry Tabb, CEO and founder of Tabb Group, in Wall Street and Technology magazine: NYSE TransactTools May Be NYSE Euronext’s Most Important Asset; NYSE TransactTools, a FIX-engine provider, could be the ticket to the NYSE’s survival. Excerpt:

So where does NYSE TransactTools fit into the equations? One of the critical factors driving flow to the largest brokers is IT. As electronic trading, algorithms, latency, speed and liquidity pool connectivity become more critical, the amount of technology needed to trade becomes more significant. The more expensive it is to acquire this technology, the more difficult it is for the small and midtier players to compete with the top brokers. TransactTools is one of the only firms that can change this equation.

Since everyone trading at the NYSE needs to be connected to SFTI (the only way to get to NYSE) and NYSE is connected to all other markets (a Reg NMS requirement), that means SFTI is the only network that literally connects all U.S. brokers, exchanges and ECNs. If TransactTools, via Wombat, can develop an effective, cost-sensitive hosting solution in the SFTI network, NYSE TransactTools can begin to bring down the cost of high-speed/low-latency market data needed to trade. And if NYSE TransactTools can embed low-latency transport, a set of flexible algorithms, a DMA/EMS platform, CEP and a time-series database into SFTI, NYSE TransactTools can begin to empower the midtier and smaller brokers that are quickly being shut out of the market.

Not to take Mr. Tabb too literally, but I think some of our other businesses could also lay claim to being our “most important asset.” Intangibles such as brand, reputation and credibility are also critical components of our future success. But his point is well taken. It’s clear that TransactTools and our other Advanced Trading Solutions businesses are becoming a core component of NYSE Euronext, complementing our existing markets, listings and data businesses and creating a new avenue for serving customers and growing our company.

Interesting article by Larry Tabb, CEO and founder of Tabb Group, in Wall Street and Technology magazine: NYSE TransactTools May Be NYSE Euronext’s Most Important Asset; NYSE TransactTools, a FIX-engine provider, could be the ticket to the NYSE’s survival. Excerpt:

So where does NYSE TransactTools fit into the equations? One of the critical factors driving flow to the largest brokers is IT. As electronic trading, algorithms, latency, speed and liquidity pool connectivity become more critical, the amount of technology needed to trade becomes more significant. The more expensive it is to acquire this technology, the more difficult it is for the small and midtier players to compete with the top brokers. TransactTools is one of the only firms that can change this equation.

Since everyone trading at the NYSE needs to be connected to SFTI (the only way to get to NYSE) and NYSE is connected to all other markets (a Reg NMS requirement), that means SFTI is the only network that literally connects all U.S. brokers, exchanges and ECNs. If TransactTools, via Wombat, can develop an effective, cost-sensitive hosting solution in the SFTI network, NYSE TransactTools can begin to bring down the cost of high-speed/low-latency market data needed to trade. And if NYSE TransactTools can embed low-latency transport, a set of flexible algorithms, a DMA/EMS platform, CEP and a time-series database into SFTI, NYSE TransactTools can begin to empower the midtier and smaller brokers that are quickly being shut out of the market.

Not to take Mr. Tabb too literally, but I think some of our other businesses could also lay claim to being our “most important asset.” Intangibles such as brand, reputation and credibility are also critical components of our future success. But his point is well taken. It’s clear that TransactTools and our other Advanced Trading Solutions businesses are becoming a core component of NYSE Euronext, complementing our existing markets, listings and data businesses and creating a new avenue for serving customers and growing our company.

I was on the trading floor for this morning’s Opening Bell, and the first few minutes were kind of incredible.

As of 09:31:19, we were trading 4.7 million shares a second on NYSE. That led to about 500 million shares in the first five minutes.

In the first half hour, NYSE traded a record 806.86 million shares, topping the old record of 790.15 million from the previous quarterly expiration, 21 Dec., 2007.

But I think those things are to be expected with a quarterly expiration.

What really struck me was that in the first five minutes, we had an 89-percent share of the trading in NYSE-listed issues. I asked some folks on the floor why such an exceptionally high percentage of customers would choose to send their orders to NYSE for the most critical time in a major expiration.

The answer I got: price and certainty. In crunch time, you can get it done here, and you can get it done at the right price.

It was nice to see so many customers voting for NYSE with their feet. Much appreciated.

Just coincidentally, some folks from our tech team rang the Opening Bell. There were being recognized for for migrating the industry-wide Consolidated Tape and Consolidated Quote systems from mainframe systems to a more cost-effective, lower-latency environment. This is part of realizing technology synergies with the NYSE Euronext integration. Nicely done, my colleagues — keep it coming!

I was on the trading floor for this morning’s Opening Bell, and the first few minutes were kind of incredible.

As of 09:31:19, we were trading 4.7 million shares a second on NYSE. That led to about 500 million shares in the first five minutes.

In the first half hour, NYSE traded a record 806.86 million shares, topping the old record of 790.15 million from the previous quarterly expiration, 21 Dec., 2007.

But I think those things are to be expected with a quarterly expiration.

What really struck me was that in the first five minutes, we had an 89-percent share of the trading in NYSE-listed issues. I asked some folks on the floor why such an exceptionally high percentage of customers would choose to send their orders to NYSE for the most critical time in a major expiration.

The answer I got: price and certainty. In crunch time, you can get it done here, and you can get it done at the right price.

It was nice to see so many customers voting for NYSE with their feet. Much appreciated.

Just coincidentally, some folks from our tech team rang the Opening Bell. There were being recognized for for migrating the industry-wide Consolidated Tape and Consolidated Quote systems from mainframe systems to a more cost-effective, lower-latency environment. This is part of realizing technology synergies with the NYSE Euronext integration. Nicely done, my colleagues — keep it coming!

Forgive me, I knew this on Monday and totally forgot to blog it — today is the quarterly expiration of stock and index futures and options. It’s usually the third Friday of the last month of the quarter, but because we’re closed on Friday, it’s today.

Here is the memo with the relevant procedures and rules.

What else can I tell you about today?

On This Day in 1969, according to NYTimes.com, John married Yoko.

Finally made the plane into Paris,
Honeymooning down by the Seine.
Peter Brown called to say,
“You can make it OK,
You can get married in Gibraltar near Spain.” …

You know the rest. Happy anniversary, you crazy kids.

Today also is the birthday of Frederic W. Taylor (1856-1915), “an American inventor who helped industries worldwide become more efficient.” I had never heard of him, but apparently, some of the management processes that we business types today started with Mr. Taylor. From his Times obit:

The writings and lectures of Frederic Winslow Taylor formed the basis of the recent reorganization of methods of handling labor In many of the largest industries in the country. The articles of Mr. Taylor on “Scientific Management” in 1911 had a good deal to do with giving its new, special meaning to the word “efficiency” and making it the watchword which it has become since that time.

One of his leading doctrines which has made a deep impression on business and industry in this country since that time is that a man who proves incompetent at one job should be fitted in where he can give good service, instead of being discharged. His life work was chiefly devoted to the simplification of industrial processes to reduce costs and increase outputs.

Mr. Taylor was born at Germantown, Philadelphia, on March 20, 1856, and was graduated from Stevens Institute of Technology in 1883. He won the doubles championship of the United States at tennis at Newport in 1881. He entered the employ of the Midvale Steel Company at Philadelphia in 1878 and was successively gang boss, assistant foreman, foreman of the machine shop, master mechanic, chief draughtsman, and chief engineer.

In 1889 he began his special work of reorganizing the management of manufacturing establishments. A plant that he made over was made over from top to bottom. He laid out the system from the duties of the boy who carried drinking water to the unskilled laborers to the duties of the President, giving his solution to the problems of shop, office, accounting department and sales department, and emphasizing the necessity for the humane treatment of labor. Some of the big shops into which he introduced his theories of scientific management are the Bethlehem Steel Company, Cramp’s Shipbuilding Company, and the Midvale Steel Company.

For his invention of the Taylor-White process of treating modern high-speed tools he received a gold medal from the Paris Exposition of 1900. He had received about 100 patents for various inventions, many of which are in general use.

Humane treatment of labor was not exactly in vogue at the turn of the century, and for his advocacy of it, a tip of the hat to Mr. Taylor.

As if you need reminding on this, we’re closed tomorrow. Hope everyone enjoys the holiday weekend. Might be a good time to reflect on another piece of the above lyric from ol’ Johnny:

Last night, the wife said,
“Oh boy, when you’re dead,
you don’t take nothing with you but your soul.”
THINK!

NYSE Gives Floor a Credit to Provide Liquidity (SecuritiesIndustryNews.com) Excerpt:

The NYSE Hybrid Market has begun offering floor brokers a credit for providing liquidity, a signal that it is inching closer to the maker-taker fee model prevalent among execution venues. However, the credit–NYSE’s first for the floor–is unlikely to draw new liquidity.

The article’s reasoning behind that thesis:

“The liquidity providers attracted to the higher rebates are typically electronic trading firms using sophisticated order-routing systems and algorithms to pursue statistical arbitration [I think they mean arbitrage]-type strategies.

Those systems, operating on extremely tight margins, send orders to venues offering best price with the most attractive rebate. However, notes richard Rosenblatt, CEO of New York-based Rosenblatt Securities, automated strategies can’t be carried out via floor brokers using handheld devices. Consequently, the new rebate is unlikely to increase the volume of order brokers post.

Rosenblatt said he believes the credit confirms that NYSE management views the floor as a critical business component. “This is an indication that the exchange actually believes its rhetoric, because it’s putting extra money in agents’ pockets at a time when they sorely need it,” he said, adding, “It backs up their repeated comments that they want agents on the floor creating unique value for customers.”

I appreciate Rich’s thoughtful comments. The credit, by itself, indeed is not a panacea; it is just one of a number of steps that we hope will add up to a significant, cumulative impact on floor brokers and their customers. Attracting liquidity surely is a matter of more than just addressing trading costs. Costs do matter, of course, but they do so in combination with the ability to provide such things as best price as well as value-added service and information. And of course, brokers need the electronic tools to deliver these goods to customers.

We want to weave together these components in such a way that customers recognize that they’re missing something by not starting with the NYSE trading floor. I hope that others outside these four walls see the credit as Rich does — not a silver bullet by itself, but tangible evidence that we mean to continue working to provide customers with ever-more-compelling reasons to come here.

Happy Wednesday, folks. Looking forward to seeing the Visa IPO list on NYSE this morning — the biggest in U.S. history.

Speaking of history, a little trivia for you:

Today in NYSE History (NYSE.com) — 19 Mar 1888: A rival stock exchange, the Consolidated Stock Exchange, was organized through the merger of several markets in mining and petroleum company shares.

Also On This Day (NYTimes.com) in 1918, Congress approved daylight-saving time (my favorite time of year); and in 1962, Bob Dylan released his self titled debut album.