In a June 8 rule filing with the Securities and Exchange Commission by the New York Stock Exchange LLC that the SEC declared effective immediately, the NYSE adopted rules to allow member firms to trade securities in all markets from their booth on the NYSE floor, subject to certain conditions. In a series of Information Memos and Member Education Bulletins issued in 2005 and 2006, the NYSE allowed firms to trade in securities listed on Nasdaq and equities listed on NYSE Arca from their floor booth.
The new rules and related conforming rule changes would permit member organizations to operate within their booth premises similar to a member organization’s “upstairs” office. To do so, a member firm must obtain prior NYSE approval. Member firms doing so will have to comply with all NYSE rules applicable to a public business. Booth personnel will have to have the required registrations and there needs to be independent compliance personnel and proof of adequate supervisory control. The NYSE needs to be given detailed information regarding the proposed system and order handling process as well as evidence that the firm has adequate, NYSE pre-approved, written procedures and guidelines to supervise the booth personnel and their activities and a process for periodic review of these procedures and guidelines. The NYSE will periodically examine a member firm’s business conducted at its approved booth premise.
Finally, firms are prohibited from executing from the floor booth any transaction for their own account, the account of an associated person and an account with respect to which they or an associated person exercises investment discretion.