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Fri, May 19, 2000
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NYSE Aims for Longer Trading Day
NEW YORK — Plans to move the New York Stock Exchange toward round-the-clock trading by the year 2001 are not yet written in stone, but the idea is a cornerstone of the Big Board's aim to be a powerhouse of global trading.

"We have to be flexible, trading equities for 20 to 22 hours a day, if not having a 24-hour day," NYSE chairman Richard Grasso said in an interview.

Grasso said he has been working toward a vision of a longer trading day to boost trading in non-U.S. stocks for about three years.

He has said a possible scenario could involve expanding trading to start at 5 a.m. Eastern time and run through midnight.

The NYSE bell currently rings in the session at 9:30 a.m. Eastern time and rings again to close trading at 4 p.m.

People close to the exchange said they thought the idea was still in the early stages, as Grasso tries to read the responses from the myriad NYSE interest groups affected. The decision would affect specialists, seatholders, floor traders and big institutions that trade there.

The hefty costs to staff the NYSE trading floor and the trading desks at Wall Street brokerages could spark protests, but Grasso was hoping the potential profit of more trading hours will make Wall Street warm up to the idea.

"There are some people who don't like it and lots of problems to be worked out, but I'm sure they will work out something that's best for the exchange and the industry," said Mike Newman, who works on the floor for broker A.G. Edwards. "This is the future of a global exchange."

Potential issues for seatholders include questions about whether ownership of seats could be split up or partially leased for early and late shifts.

Any plan would have to be approved by the NYSE board and the U.S. Securities and Exchange Commission.

"We are still primarily a domestic market," Grasso said Tuesday at a Wall Street technology conference.

But he hopes that will change.

"Five years from now, it is reasonable to expect that perhaps as much as 30 to 35 percent of our volume will be from the great companies that are yet to arrive in our markets, companies from around the globe," he said.

Grasso said in December it would not be unreasonable to see three separate trading sessions. Traders would work one of the three shifts, with time-specific security badges.

The NYSE said it planned to first try an early morning shift, focusing on European issues, with perhaps as many as 500 stocks trading.

Under the planned phase-in, about 500 stocks would first be traded in an extended period and, if the move were successful, an evening session for trading non-U.S. stocks would follow.

Provided there was sufficient liquidity, the NYSE would then also begin trading selected U.S. companies in the early or late sessions, in addition to their usual trading session.

The late session could face one significant hurdle — there are only about 60 to 70 Asian stocks that trade on the NYSE. But Grasso said he hopes that as more companies join, with China a particular growth spot, that could ease.

Grasso said he hopes to open an early session in the second half of the year 2000, after the millennium Y2K computer glitch and decimalization of trading are solved.

The early session would take place in the NYSE's planned trading room for non-U.S. stocks at 30 Broad Street, just a few feet south of the NYSE's historic facade. The exchange is currently made up of a maze of interconnected buildings at Broad and Wall Streets.

U.S. Treasury Secretary Robert Rubin, asked by Reuters Television about the idea of longer NYSE hours, said he had "no idea" about how the NYSE proposal would work out but said he expected longer trading hours in principle.

Meanwhile the NYSE's biggest U.S. rival, the Nasdaq, said it was also considering later trading.

"We have been discussing the idea of extending our trading hours with market participants and our board for some time," a spokesman said. "Our global initiatives with the Stock Exchange of Hong Kong in Asia and the Deutsche Boerse in Europe carry with them an interest in eventually extending our trading hours to reflect the needs of investors around the world."

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