Market structure and market share: Understanding the NYSE’s competitive position

Abstract

The New York Stock Exchange (NYSE) is at the center of an increasing chorus of market professionals who complain that investors are at the mercy of a system that caters to exchange specialists. While structural change may be necessary to address the NYSE’s governance issues, talk about wholesale structural change in the trading of NYSE‐listed securities is misguided. As this paper discusses, the real issue is the lack of competition among the marketplaces that trade NYSE‐listed shares. The article is intended to contribute to the market structure debate by exploring the market structure of the NYSE, the competitive environment for exchange‐listed securities, the limitations associated with the current structure, and what changes might be pursued. In particular, the author calls attention to the “trade‐through” rule, implemented through the Intermarket Trading System (ITS), which benefits the NYSE by discouraging orders from being routed to alternative marketplaces

Citation

Rude, M.G. (2004), "Market structure and market share: Understanding the NYSE’s competitive position", Journal of Investment Compliance, Vol. 4 No. 4, pp. 73-78. https://doi.org/10.1108/15285810310813301