Apologies for multiple XBRL-related posts in one day, but your no-longer-quite-so-humble blogger was honored to be invited on the SEC’s conference call this afternoon with a dozen bloggers about interactive data reporting, ahead of Monday’s expected action by the Commission on this more-accessible type of financial disclosure.

Am jammed at the moment and will write more about this later, but for the moment just wanted to tell you that Chairman Christopher Cox joined the end of the call. He talked about how the reporting language would make it easier for investors to sift, compare and analyze data from companies, and that it will also make easier the exchange of financial information globally in addition to domestically. He said, “It’s going to be so breathtakingly different from what people even in recent years have been used to, that it’s sometimes hard to get people to focus on the big change that’s in store.”

If no one else has blogged about this yet, then I have one word to add:

Scoop!

Cox used to be the first SEC chairman to write into a blog (Jonathan Schwartz’s); he’s now also the first to participate in a teleconference with bloggers, which also was the first the SEC has ever conducted.

Glad they had the call; I learned a lot; will share more later. Smart move on their part, too, to have the chairman join the call. He’s walking the talk. Or, for a call, is it talking the talk? Anyway, he’s obviously committed to this worthy initiative.

I’ve ranted here now and again about how public companies should join the move to report their financial disclosures in an interactive data format (known as XBRL, or eXtensible Business Reporting Language) to make the information easier for investors to search and analyze online. More to come on that shortly: on Monday, the SEC is scheduled to decide on its plans for any requirements and timeline for public companies to file their financial statements in the format.

Disclosure: NYSE Euronext has been filing its own financial statements in XBRL, as a participant in the SEC’s pilot program on interactive reporting.

If you thought I was all geeky-excited about this, I think my enthusiasm pales compares to that of Cate Long of the ShopYield blog, whose post on the subject brings to mind that Meg Ryan scene from “When Harry Met Sally.” You know the one. Excerpt:

CFO.com is reporting that the SEC will vote on Monday whether to require public companies to make their financial statement filings in XBRL …

To the Commissioners … YES … YES … YES …

Although it’s often hard to communicate the benefits of data standardization it is so powerful… one can point to the use of hyper text markup language in the development of the Internet… who would have guessed the information hurricane that was unleashed…

Poor CFOs and IT folks will groan … one more mandate for their overworked departments… it’s true it will be more work… but the markets and public will benefit … for decades to come … YES … YES … YES …

Okaaaayyyy. Come on, Cate, tell us how you really feel! : )

Back here on the ground, I’m taking next week off — or at least I’m supposed to, though the working world sometimes gets in the way — so posting here will be at least lighter than usual. Be good and be well, my friends. A little shot of trivia before I go:

Today in NYSE History
18 April 1980 — The NYSE’s first female specialist, Amy W. Newkirk, is admitted to membership.

I continue to be blown away by that. Happy that it ever happened, completely ashamed that it didn’t happen until 1980, 17 years after Muriel Siebert became the first woman member in 1967, which in itself was way, way too long in coming. Clubs become better places for opening their doors.

I’ve ranted here now and again about how public companies should join the move to report their financial disclosures in an interactive data format (known as XBRL, or eXtensible Business Reporting Language) to make the information easier for investors to search and analyze online. More to come on that shortly: on Monday, the SEC is scheduled to decide on its plans for any requirements and timeline for public companies to file their financial statements in the format.

Disclosure: NYSE Euronext has been filing its own financial statements in XBRL, as a participant in the SEC’s pilot program on interactive reporting.

If you thought I was all geeky-excited about this, I think my enthusiasm pales compares to that of Cate Long of the ShopYield blog, whose post on the subject brings to mind that Meg Ryan scene from “When Harry Met Sally.” You know the one. Excerpt:

CFO.com is reporting that the SEC will vote on Monday whether to require public companies to make their financial statement filings in XBRL …

To the Commissioners … YES … YES … YES …

Although it’s often hard to communicate the benefits of data standardization it is so powerful… one can point to the use of hyper text markup language in the development of the Internet… who would have guessed the information hurricane that was unleashed…

Poor CFOs and IT folks will groan … one more mandate for their overworked departments… it’s true it will be more work… but the markets and public will benefit … for decades to come … YES … YES … YES …

Okaaaayyyy. Come on, Cate, tell us how you really feel! : )

Back here on the ground, I’m taking next week off — or at least I’m supposed to, though the working world sometimes gets in the way — so posting here will be at least lighter than usual. Be good and be well, my friends. A little shot of trivia before I go:

Today in NYSE History
18 April 1980 — The NYSE’s first female specialist, Amy W. Newkirk, is admitted to membership.

I continue to be blown away by that. Happy that it ever happened, completely ashamed that it didn’t happen until 1980, 17 years after Muriel Siebert became the first woman member in 1967, which in itself was way, way too long in coming. Clubs become better places for opening their doors.

Photograph by Tom Doyle, via Cornwall-on-Hudson.com

This morning’s post is about a relatively mundane subject, so I thought I’d include the above photograph to lift the heart a bit on a Monday morning. The local paper in my town (cleverly called the Cornwall Local) has taken to posting readers’ photographs online, and this one is an incredible beauty that I couldn’t resist. It was photographed Saturday morning, following overnight rain, as the sun lifted veils of mist from our area. I think the editor captured it quite well:

Tom Doyle’s photo of the boathouse on Constitution [Island] calls to mind the magnificent fog-covered woods of the Hudson Valley captured by famed landscape painter Thomas Cole.

Hope you enjoy it. Now onto business.

In case you didn’t see it, our Trader Updates page has posted a notice of an industry-wide test of procedures for planned, delayed market openings. Registration for the 7 June test is requested by 2 June. Excerpt:

The NYSE plans to participate in an industry-wide test of Delayed Opening procedures under the auspices of SIFMA on Saturday, June 7. The purpose of the test is to assure that in the event of a planned, delayed opening, markets are able to open smoothly and efficiently. Registration is required for participation in this test as only registered firm lines will be started.
Member Firm Registration Form

The NYSE will bring its systems up on Saturday, June 7, at 8:00 am, Eastern Time, with a 10:30 am open and a close at 11:30 am. For firms that will also be testing from BCP alternate sites, we recommend that you switch back to primary sites after the test. NYSE will be available for connectivity testing from 1:00 pm thru 3:00 pm for proving primary site connectivity for those firms that wish to validate normalization. The market will be closed during this period. Orders entered by firms will reject with a “market closed reject,” which will prove connectivity.

We will notify firms at a later date which securities will be used on June 7. We will use the last sales and open order files for the selected securities from the close of business on Friday, June 6, 2008. Please note that you will receive only executions, UR Outs, etc., on these securities. If you enter orders in symbols other than the test securities, the orders will not reject; nor will you receive an execution of the order.

CTS/CQS will be open during the test. NYSE will transmit market data information (quotes and trades) to firms with SFTI connections for market data information. If you do not connect directly to the Exchange for this information, please check with your vendor on availability.

BBSS and Floor Broker Handhelds will not be in operation during the day of the test. Since only a couple of stocks will be traded, the NYSE urges firms to send only a small order flow prior to the open and then again after the open. This is not a capacity test.

To provide the most realistic environment for the test, the NYSE is not using a separate test environment. We will use the systems you use every day to route order flow to the NYSE. Therefore, any residual test data left in the lines after the test is completed will be purged.

NOTE: For those firms wishing to participate in the June 7 test from both their primary and back-up sites, we will be offering a May 3 test of connectivity from 8:30 am to 10:30 am. Like the post-test period on June 7, orders entered by firms will reject with a “market closed reject,” which will prove connectivity.

Whether or not you participate in the test, we advise all member firms not to allow messages/orders, etc., to be queued over the weekend in CCG or CMS for Monday morning.

Speaking of the market being closed for unusual reasons:

Today in NYSE History
14 April 1945 — The NYSE was closed for the National Day of Mourning for President Franklin D. Roosevelt.

Just out from Traders Magazine: NYSE to Phase Out “Go-Along” Orders. Excerpt:

…”We are exploring the replacement of CAPs with more effective alternatives that better respond to broker and customer input,” an NYSE Euronext spokesperson said.

CAP, or convert-and-parity, orders have long been an important part of trading on the NYSE floor. Also known as “go-along” orders, they are handled by specialists on behalf of floor brokers busy with other tasks.

The institutional orders require specialists to trade along with market prices, but never set them. That allows the customers to quietly transact at prices that don’t vary too much from the day’s average.

Since the advent of the NYSE’s Hybrid marketplace, however, use of CAPs has dropped significantly. The NYSE has built trading functionality into its handhelds that lets floor brokers do the job themselves. …

The NYSE acknowledges CAPs are less useful. “The CAP order doesn’t work as well in this environment,” Lou Pastina, the NYSE’s executive vice president of operations, told Traders Magazine recently. “So we think algorithmic access is a much better tool. We will upgrade the brokers to that.”

We’re obviously continuing to work to put more value-added in the hands (and the hand-helds!) of floor brokers.

Just out from Traders Magazine: NYSE to Phase Out “Go-Along” Orders. Excerpt:

…”We are exploring the replacement of CAPs with more effective alternatives that better respond to broker and customer input,” an NYSE Euronext spokesperson said.

CAP, or convert-and-parity, orders have long been an important part of trading on the NYSE floor. Also known as “go-along” orders, they are handled by specialists on behalf of floor brokers busy with other tasks.

The institutional orders require specialists to trade along with market prices, but never set them. That allows the customers to quietly transact at prices that don’t vary too much from the day’s average.

Since the advent of the NYSE’s Hybrid marketplace, however, use of CAPs has dropped significantly. The NYSE has built trading functionality into its handhelds that lets floor brokers do the job themselves. …

The NYSE acknowledges CAPs are less useful. “The CAP order doesn’t work as well in this environment,” Lou Pastina, the NYSE’s executive vice president of operations, told Traders Magazine recently. “So we think algorithmic access is a much better tool. We will upgrade the brokers to that.”

We’re obviously continuing to work to put more value-added in the hands (and the hand-helds!) of floor brokers.

On the way home last night, I read an article in the Journal about Heather Armstrong, the “power mom” blogger at Dooce.com whose work is apparently so personal and provocative that someone she thought was a friend “posted a comment saying she ‘wanted to punch me in the face because she hated me so much.’” The article says Ms. Armstrong prints out such such vitriolic reactions and “puts them on her driveway and runs over them with her car,” which she says makes her life “one thousand percent better.”

There must be some interesting PTO meetings in that school district.

Anyway. Reading about her blog (which I checked out and is quite well written and entertaining) made me think quite kindly of your comments, gentle readers of Exchanges. Although you often pine for our old market model, lament not having more price improvement and bemoan tick-by-tick volatility, you have never threatened to punch me in the face Not even my cornball jokes and creaky trivia have driven you to that.

And for that, I thank you, as does my face. Particularly grateful is my nose, which is large enough without any enhancement via fisticuffs.

In fact, more often than not, our readers ask good questions and offer good coments that lead to some valuable (I hope) discussions and exchanges of information. I hope to get back to turning more comments and questions into new posts, so as to boost their visibility and utility to others.

A good example would be the back-and-forth following the recent post about our upcoming new Reserve Orders. I hope replaying it here might be of interest to others who might have missed it:

Not to take away from the big news on reserve orders, but there are some cool photos and videos of Reagan’s historic floor visit - http://www.nyse.com/about/history/1173354276796.html
by Danielle Gustafson on March 28, 2008 1:14 PM

And inverted rates for high volume customers to boot! Well done.
by Jamie Selway on March 31, 2008 4:20 PM

Maybe I’m just a bit of a cynic, but this is kind of like a 3rd world country touting how they just got color TV. At this point, reserve orders are not an innovation — they are something everyone else has been offering for a long time, and NYSE is *finally* catching up. Your systems are still the slowest, so you’ll really have to do better if you want to get your market share back.
by Phil Anderer on April 2, 2008 1:31 PM

Phil — You’re correct that these solutions are new only to our market. I do think it’s important that we’re finally listening to customers and providing these order types, and that’s why I’m touting them. You’re also right about speed; we’re working on that as well.

PS — Nice moniker. Don’t worry, I won’t tell your wife.
by Ray Pellecchia on April 2, 2008 4:49 PM

what is the difference between these new reserve orders and what i am seeing now on the dot when orders sit on the book for a few hundred shares or more and continue to fill beyond what is posted.
thanks,
by josh on April 4, 2008 11:39 PM

Josh — The new Reserve Orders can be entered by any member firm; currently, Reserve Orders in our market can be entered only by specialists and floor brokers.

There are a number of possible explanations of what you describe:

– Reserve Orders from specialists and brokers;
– Repeat trades at the quote, due to elected “cap” orders (percentage or go-along orders);
– Additional interest arriving immediately after an order initially executes;
– Order partially executes here, and balance gets routed away and executed (wouldn’t appear on the tape as an NYSE print, but the customer would get multiple fills beyond the published quote size).

Hope that’s of some help. Thanks for writing, Josh.
by Ray Pellecchia on April 8, 2008 11:39 AM

Ray,

Whut a wonderful and semple sit you have! It is the bust site evar!!!!!!!

Has the pilot program started now?

Also, can you explain what this means from Phase 2:

“In addition, floor brokers interested in trading in size will be able to probe this order type on request and in a fully auditable fashion.”

This seems to contradict the notion “completely dark” liquidity. How exactly will floor brokers be able to see that reserve size exists? And auditable by whom? …to what end?

Thanks,

Ian
by Ian Cognito on April 8, 2008 3:43 PM

Ian — First, LOL — thanks for picking up on my post about spammish style. Nicely done.

The pilot program has not yet started. We anticipate it will start later this month, and will let you know as soon as we have a definite date.

Sorry our language may be confusing on this. The completely dark orders are not probe-able; it’s the Block Reserve version that can be probed.

On the Block Reserve Orders, only the published amount will be visible on the Display Book. If a floor broker looking to trade “size” asks the specialist for a “market look,” the specialist can quickly pull up an on-screen template — the same one used for entering “manual” trades. The template will show aggregated reserve interest, which the specialist can then share verbally with brokers. That feature is designed to facilitate getting block orders executed.

Usage of these looks will be auditable by NYSE Regulation’s Market Surveillance group, for regulatory purposes.

We hope that customers who have asked for these types of reserve features will find that the new order types offer them more choice in trading our market.
by Ray Pellecchia on April 9, 2008 11:22 AM

Thanks Ray — I appreciate the clarification. I’m looking forward to the hidden/reserve orders.

Ian
by Ian Cognito on April 9, 2008 4:07 PM

Hope readers appreciate the beauty of Ian Cognito asking about hidden/reserve orders. : )
by Ray Pellecchia on April 9, 2008 4:35 PM

Even the trivia is getting a reaction, as evidenced by my colleague Danielle’s comment above. I mentioned yesterday in a post that I had to look up the historical term “stock jobbers” and even before I did, my friend Bart Ward chimes in with this:

Stock-jobbing is a term with two meanings. In English trading it refers to the legitimate operation of market making, esp. prior Big Bang. The more notorious meaning are people who would ramble through the coffee houses, spreading negative rumors about a company. This was followed by a second canvassing of these houses to buy these shares up once they had fallen because of the bad news rumors. Some coffee houses (i.e. the Tontine Coffee House at 82 Wall) are where stocks were traded prior to the formation of exchanges.
by Bart Ward on April 10, 2008 4:33 PM

We all have a lot to learn from each other. Sharing it here makes the blog go ’round, and seriously, I thank you for that.

Whew. Sorry for the long-winded post. Happy Friday, folks!

For anyone who missed it last night: Nightly Business Report has posted a transcript and video of the interview with our CEO Duncan Niederauer. Here is co-anchor Susie Gharib’s blog post on the same subject, as well as my related post from last night, which has drawn a couple of good comments.

Excerpt from the transcript:

GHARIB: Duncan, how do you plan to deal with the intense competition, not only from the NASDAQ but so many start-up exchanges in the U.S. and Europe?

NIEDERAUER: We need to get closer to the customers, roll out the functionality they’re looking for, try to remind ourselves that even though the liquidity is fragmented, we can still be a very, very meaningful player in some of the markets where before are we going to have market share that we had three or four years ago? No. But there is a lot of other new areas where we can get a lot better.

GHARIB: As you know, the momentum is towards electronic trading. I know this is a touchy subject here at the exchange, but don’t you have to accelerate that move into electronic trading just to stay competitive?

NIEDERAUER: We have embraced technology here. I think people think because we still have a floor we’re somehow resistant to the changes. We know that’s where the market is going. We just don’t think all electronic all the time is the right answer. And we think the markets over the past few months have proven that, that if you’re all electronic all the time and there’s no opportunity for price discovery, all that does is maximize volatility at the time when you least want that volatility.

Happy Thursday, folks. On the historical trivia front:

Today in NYSE History(NYSE.com)
10 April 1792 — The New York State legislature passed an act “to prevent the pernicious Practice of Stock-Jobbing,” placing restrictions on certain classes of stock transactions.

Good word, pernicious. Have to read up on “stock-jobbing.”

Also in the annals of the pernicious, in more recent history:

Financial Flashback (WSJ.com)
April 10, 2002 — New York State Attorney General Eliot Spitzer said he wants major structural changes in the way Wall Street firms provide stock research. Other firms may be in for the same public flogging Merrill received Monday.

For anyone who missed it last night: Nightly Business Report has posted a transcript and video of the interview with our CEO Duncan Niederauer. Here is co-anchor Susie Gharib’s blog post on the same subject, as well as my related post from last night, which has drawn a couple of good comments.

Excerpt from the transcript:

GHARIB: Duncan, how do you plan to deal with the intense competition, not only from the NASDAQ but so many start-up exchanges in the U.S. and Europe?

NIEDERAUER: We need to get closer to the customers, roll out the functionality they’re looking for, try to remind ourselves that even though the liquidity is fragmented, we can still be a very, very meaningful player in some of the markets where before are we going to have market share that we had three or four years ago? No. But there is a lot of other new areas where we can get a lot better.

GHARIB: As you know, the momentum is towards electronic trading. I know this is a touchy subject here at the exchange, but don’t you have to accelerate that move into electronic trading just to stay competitive?

NIEDERAUER: We have embraced technology here. I think people think because we still have a floor we’re somehow resistant to the changes. We know that’s where the market is going. We just don’t think all electronic all the time is the right answer. And we think the markets over the past few months have proven that, that if you’re all electronic all the time and there’s no opportunity for price discovery, all that does is maximize volatility at the time when you least want that volatility.

Happy Thursday, folks. On the historical trivia front:

Today in NYSE History(NYSE.com)
10 April 1792 — The New York State legislature passed an act “to prevent the pernicious Practice of Stock-Jobbing,” placing restrictions on certain classes of stock transactions.

Good word, pernicious. Have to read up on “stock-jobbing.”

Also in the annals of the pernicious, in more recent history:

Financial Flashback (WSJ.com)
April 10, 2002 — New York State Attorney General Eliot Spitzer said he wants major structural changes in the way Wall Street firms provide stock research. Other firms may be in for the same public flogging Merrill received Monday.

Our CEO Duncan Niederauer was just interviewed on PBS’s Nightly Business Report. Sorry for the lack of notice; I knew it was coming but got the date wrong.

NBR co-anchor blogged about the interview here. She says: “The word ‘authentic’ has been overused lately. But it’s about the best word I can come up with to describe the CEO of the New York Stock Exchange who I interviewed for the first time today.” Excerpt:

Niederauer talks and acts like a stock trader. His style is breezy and friendly. Minutes after I shook his hand, we were already talking about his years at Goldman Sachs, his three kids, and why he’s a fan of the Cleveland Indians (His mother is from Brooklyn and doesn’t like the Yankees, forcing him to pick any other team to root for. He was attracted to the underdog Indians.) He’s starkly different from Thain, who is reserved and formal. I found it revealing that Niederauer chose not move into the grand office that Thain occupied — with a combination of antique English furniture and a stock ticker — preferring a more modest space down the hall.

Before and during the interview, Niederauer spoke candidly and directly. It’s refreshing to talk to a CEO who’s unscripted and unrehearsed. He says what he thinks. He even told me that he got in trouble recently for being too candid. At a gathering in Washington DC on the same day that the Federal Reserve slashed interest rates by three-quarters of a percent, Niederauer commented that a half percent cut would have done the job. Well, his off the cuff remark was widely quoted, and he was criticized. His comments were considered inappropriate because he is not an economist. Niederauer told me he’s more careful about what he says now. I just hope he won’t get too careful. It will be a shame if he becomes predictable and programmed like so many American CEOs.

I think I can speak for many who work with Duncan when I say: Predictable and programmed? Rest easy, Susie, not much chance of that happening.

Hey, but Cleveland? I mean, Cleveland? After the Joba playoff game last year, that one bugs this ol’ Yankee fan. Oh well. Guess you have to respect anyone in New York who roots for the Indians and admits it.

Will add to this post a link to the interview when NBR puts one up, which I understand will be around 9ish tonight.