NEW YORK, Oct 10 (Reuters) - NYSE Euronext, which is about to close its more than $10 billion sale to IntercontinentalExchange, is prepared to put the self-regulatory status of exchanges on the table as part of a comprehensive review of U.S. market structure, Chief Executive Duncan Niederauer said on Thursday.
Stock trading that takes place on more than 50 non-exchange venues has helped lead to “a fragmented, increasingly opaque market place that has lost the confidence of investors everywhere,” Niederauer said at an Investment Company Institute conference.
To win that confidence back, exchanges and other industry participants, such as alternative trading systems and stock wholesalers, need to sit down with regulators and reconsider all of the rules that have helped to create the current market structure, which has grown very complex, he said.
That includes the ability of exchanges to regulate themselves and the fee and rebate structure of exchanges, he said.
“We are willing to put it all on the table ... everyone has to give to get,” he said.
In return, Niederauer said, NYSE would like to see new rules around trading that bypasses exchanges for venues such as so-called dark pools - trading platforms where buyers and sellers of stocks remain anonymous and their orders are hidden until they are executed.
NYSE has long argued that the rise of off-exchange trading distorts prices in the public markets and makes the markets in general less transparent.
NYSE has called in the past for rules similar to those adopted by Canada a year ago requiring dark pools to offer meaningful improvement on the prices quoted on the public markets, or to require a minimum size threshold for off-exchange orders.
NYSE said on Thursday that it expects its sale to ICE to be completed by Nov. 4.
“I fully expect that we will hit that date. We are in signature gathering mode in Europe right now. We’ve been told the approvals are all forthcoming,” Niederauer said.
The NYSE CEO said he expects more consolidation in the global exchange industry and that the NYSE-ICE deal will put pressure on other exchange operators to build scale through mergers and acquisitions.