Name: MUHAMMAD AZAD
Email : [email protected]
ASSIGNMENT:INVESTMENT PORTFOLIO
TOPIC:NEW YORK STOCK EXCHANGE
SUBMITTED TO:SYED MUHAMMAD JAVED BUKHARI
SUBMITTED BY:
CLASS:M. Com 3rd Semester
SESSION:2007-2009
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Table of contents
Chapter 1 Introduction 01Definitions 01Mission statement 01Worlds largest stock exchange 01Requirements by NYSE 02Holidays 02New York stock exchange 03
Chapter 2 History of NYSE Euronext 04Listed Chinese companies 05Merger with Euronext 06Presidents & Chairman 06Ownership 09Old share certificates 09
Chapter 3 Events 11Hot event 13
Chapter 4 The role of stock exchanges 15Chapter 5 Management of NYSE Euronext 17
Board of directors 17Chapter 6 Brokerage & company listing 20
Requirements to become a broker 20Stock broking services 20Famous stock brokers 21Requirements for listing 21Listed companies 25
Chapter 7 Future of stock exchange 26
References 28
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Introduction
Definitions: An exchange on which shares of stock and common stock equivalents are
bought and sold. An exchange where security trading is conducted by professional
stockbrokers. Marketplace where brokers and dealers meet to buy and sell stocks of publicly
traded companies on behalf of investors. A formal organization, approved and regulated by the SEC, made up of
members who use the exchange to trade certain common stocks.
Mission statement
NYSE Group believes that managing diversity is a business imperative, essential to the company’s success as the leading global financial marketplace and an employer of choice. At NYSE Group, diversity means enabling people of all races, ages, genders, sexual orientations, disabilities, cultures, religions, and styles to work together effectively to meet company objectives and maximize individual potential in an environment that promotes the growth and development of all individuals.
Worlds largest stock exchange.NYSE Euronext is a worlds largest stock exchange by dollar ($) volume.
Requirements by NYSE.
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Chapter No. 1
To be listed on the New York Stock Exchange (NYSE) a company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years.
Holidays
New Year's Day (Jan. 1) Closed every year.
Martin Luther King, Jr. Day (Jan. 15) Closed for 1 minute of silence at noon since 1986. Closed all day beginning in 1998. Observed on the third Monday of January.
Lincoln's Birthday (Feb. 12) Closed every year, 1896-1953.
Washington's Birthday (Feb. 22) Closed every year. Observed on Mondays since 1971.
Good Friday Closed every year except 1898, 1906 and 1907.
Decoration/Memorial Day (May 30) Closed every year since 1873. Observed on Mondays since 1971.
Independence Day (July 4) Closed every year.
Labor Day Closed every year, 1887-date.
Columbus Day (Oct. 12) Closed every year, 1909-1953.
Election Day Closed every year through 1968.Closed presidential election years only, 1972-1980.
Armistice/Veteran's Day (Nov. 11) Closed all day, 1918 and 1921.Closed for two minutes, 1922-1933.Closed all day, 1934-1953.Closed at 11:00 am for two minutes, 1954-2006.1
Thanksgiving Day Closed every year.
Christmas Day (Dec. 25) Closed every year.
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New York stock exchange.
(U.S. National Historic Landmark)
Location: New York City, New York, United StatesBuilt/Founded: 1903Architect: Trowbridge & Livingston; George B. PostArchitectural style(s): Classical RevivalGoverning body: PrivateKey people Duncan Niederauer (CEO)
Currency United States dollarNo. of listings 4,400
IndexesNYSE CompositeDow Jones Industrial Average
Website www.nyse.com
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5 NYSE GROUPChapter No. 2
History of New York Stock Exchange.
The origin of the NYSE can be traced to May 17, 1792, when the Buttonwood Agreement was signed by 24 stock brokers outside of 68 Wall Street in New York under a buttonwood tree on Wall Street which earlier was the site of a stockade fence. On March 8, 1817, the organization drafted a constitution and renamed itself the "New York Stock & Exchange Board". (This name was shortened to its current form in 1863.) Anthony Stockholm was elected the Exchange's first president.
The floor of the New York Stock Exchange in 1908
The first central location of the NYSE was a room rented for $200 a month in 1817 located at 40 Wall Street. The NYSE was destroyed in the Great Fire of New York (1835). It moved to a temporary headquarters. In 1863 it changed its name to the New York Stock Exchange (NYSE). In 1865 it moved to 10-12 Broad Street. The Dow Jones Industrial Average (DJIA) was created by Dow Jones & Company, a financial news publisher, in 1896.
Volume of stocks traded had increased sixfold in the years between 1896 and 1901 and a larger space was required to conduct business in the expanding marketplace.[7] Eight New York City architects were invited to participate in a design competition for a new building and the Exchange selected the neoclassic design from architect George B. Post. Demolition of the existing building at 10 Broad Street and the adjacent lots started on 10 May 1901.
The New York Stock Exchange building opened at 18 Broad Street on April 22, 1903 at a cost of $4 million. The trading floor was one of the largest volumes of space in the city at the time at 109 x 140 feet (33 x 42.5 m) with a skylight set into a 72-foot (22 m) high ceiling. The main façade of the building features marble sculpture by John Quincy Adams Ward in the pediment, above six tall Corinthian capitals, called “Integrity Protecting the Works of Man”.
The building was listed as a National Historic Landmark and added to the National Register of Historic Places on June 2, 1978.
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In 1922, a building designed by Trowbridge & Livingston was added at 11 Broad Street for offices, and a new trading floor called "the garage". Additional trading floor space was added in 1969 and 1988 (the "blue room") with the latest technology for information display and communication. Another trading floor was opened at 30 Broad Street in 2000. With the arrival of the Hybrid Market, a greater proportion of trading was executed electronically and the NYSE decided to close the 30 Broad Street trading room in early 2006. In late 2007 the exchange closed the rooms created by the 1969 and 1988 expansions due to the declining number of traders and employees on the floor, a result of increased electronic trading.
NYSE Euronext-listed Chinese Companies:
The NYSE is the premier U.S. listing venue for non-U.S. companies with 418 companies from 45 countries with a global market capitalization of nearly $10 trillion.
NYSE Euronext markets list 57 companies listed from Greater China. This includes 41 companies from Mainland China listed on the NYSE, 4 from Hong Kong on the NYSE, and 5 Taiwanese companies on the NYSE, as well as 4 companies listed on NYSE Arca, and 4 companies listed on NYSE Alternext. Additionally, there are 6 companies from Greater China listed on the Free Market in Europe operated by NYSE Euronext.
The total global market capitalization of the 57 NYSE Euronext-listed companies from Greater China is around $1 trillion. In 2007, the NYSE listed 20 companies from Greater China, including 18 IPOs. In 2008, NYSE Euronext markets listed 7 companies from China, including 4 on its markets in Europe.
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Merger with Euronext.
On June 1, 2006, NYSE Group, Inc. (NYSE: NYX) and Euronext N.V. announced an agreement to combine the leading U.S. and pan-European securities trading exchanges in a merger of equals. On April, 3, 2007, NYSE Group and Euronext completed their historical business combination to create NYSE Euronext, the world's leading and most liquid exchange group.
PRESIDENTS AND CHAIRMEN OF THE NEW YORK STOCK EXCHANGE
During the 19th century and into the 20th century, the chief executive officer of the NYSE was the president, an unsalaried position held by a member of the Exchange.
When the Exchange was reorganized in 1938, the presidency became a full-time, salaried office. The president was the chief executive officer, responsible for the management and administration of the Exchange. The chairman presided at meetings of the Board of Governors and was a member of the Exchange.After another reorganization in 1972, the chairman of the Board of Directors became the full-time salaried chief executive officer of the Exchange.
In 2003 the Exchange reorganized its governing structure again, separating the offices of Chairman and Chief Executive Officer.
On March 7, 2006, the NYSE Group, a for-profit, publicly-owned company, was formed out of the merger of the New York Stock Exchange and Archipelago Holdings, Inc.
NYSE Euronext was established on April 4, 2007, by the merger of the NYSE Group and Euronext N.V.PRESIDENTS1817 - 1818 Anthony Stockholm
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1818 - 1824 G. S. Mumford1824 - 1827 Edward Lyde1827 - 1830 James W. Bleecker1830 - 1831 Russell H. Nevins1831 - 1834 John Ward1834 - 1835 R. D. Weeks1835 - 1836 Edward Prime1836 - 1837 R. D. Weeks1837 - 1851 David Clarkson1851 - 1852 Henry G. Stebbins1852 - 1857 Charles R. Marvin1857 - 1858 John R. Gourlie1858 - 1859 Henry G. Stebbins1859 - 1861 William H. Neilson1861 - 1862 W. R. Vermilye1862 - 1863 Abraham B. Baylis1863 - 1864 Henry G. Stebbins1864 - 1865 William Seymour, Jr.1865 - 1866 R. L. Cutting1866 - 1867 William Alexander Smith1867 - 1868 John Warren1868 - 1869 William Searls1869 - 1870 William H. Neilson1870 - 1871 William Seymour, Jr.1871 - 1872 William B. Clerke1872 - 1873 Edward King1873 - 1874 Henry G. Chapman1874 - 1875 George H. Brodhead1875 - 1876 George W. McLean1876 - 1877 Salem T. Russell1877 - 1878 Henry Meigs1878 - 1880 Brayton Ives1880 - 1882 Donald Mackay1882 - 1883 Frederick N. Lawrence1883 - 1884 Alfrederick S. Hatch1884 - 1886 J. Edward Simmons1886 - 1888 James D. Smith1888 - 1890 William L. Bull1890 - 1892 Watson B. Dickerman1892 - 1894 Frank K. Sturgis1894 - 1898 Francis L. Eames1898 - 1903 Rudolph Keppler1903 - 1904 Ransom H. Thomas1904 - 1907 Henry K. Pomroy1907 - 1912 Ransom H. Thomas1912 - 1914 James B. Mabon1914 - 1919 Henry G. S. Noble1919 - 1921 William R. Remick1921 - 1924 Seymour L. Cromwell1924 - 1930 Edward H. H. Simmons
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1930 - 1935 Richard Whitney1935 - 1938 Charles R. Gay1938 - 1941 William McC. Martin, Jr.11941 - 1951 Emil Schram1951 - 1967 G. Keith Funston1967 - 1972 Robert W. HaackThere was no president appointed between May 1972 and May 1980.1980 - 1984 John J. Phelan, Jr.1985 - 1988 Robert J. Birnbaum1988 - 1995 Richard A. Grasso1996 - 2001 William R. Johnston
First full-time, salaried president.2002 - 2005 Robert G. Britz (President and Co-ChiefOperating Officer)2006 - 2007 Gerald D. Putnam (President and Co-ChiefOperating Officer)2002 - 2008 Feb. Catherine R. Kinney (President and Co-ChiefOperating Officer)2007 Feb. - Nov. Duncan L. Niederauer (President and Co-ChiefOperating Officer)As of February 2008, the new position of "Group Executive Vice President” (GEVP) was introduced. No president or co-chief operating officer was appointed.CHAIRMEN OF THE BOARD OF GOVERNORSMay 1938 - June 1938 William McC. Martin, Jr.July 1938 - May 1940 Edward E. Bartlett, Jr.May 1940 - May 1941 Charles B. HardingMay 1941 - May 1943 Robert L. StottMay 1943 - May 1947 John A. ColemanMay 1947 - May 1951 Robert P. BoylanMay 1951 - May 1954 Richard M. CrooksMay 1954 - May 1956 Harold W. ScottMay 1956 - May 1958 James Crane Kellogg, IIIMay 1958 - May 1961 Edward C. WerleMay 1961 - Feb. 1962 J. Truman BidwellFeb. 1962 - May 1965 Henry M. Watts, Jr.May 1965 - May 1967 Walter N. FrankMay 1967 - May 1969 Gustave L. LevyMay 1969 - May 1971 Bernard J. LaskerMay 1971 - Aug. 1972 Ralph D. DeNunzio
CHAIRMEN OF THE BOARD OF DIRECTORSAug. 1972 - May 1976 James J. NeedhamMay 1976 - May 1984 William M. BattenMay 1984 - Dec. 1990 John J. Phelan, Jr.
First full-time, salaried chairman.Jan. 1991 - June 1995 William H. Donaldson
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June 1995 - Sept. 2003 Richard A. GrassoSept. 2003 - April 2005 John S. ReedApril 2005 - April 2007 Marshall N. CarterApril 2007 - Jan Michiel HesselsCHIEF EXECUTIVE OFFICERSJan. 2004 - Nov. 2007 John A. Thain
Nov. 2007 - Duncan L. Niederauer
Ownership
Stock exchanges originated as mutual organizations, owned by its member stock brokers. There has been a recent trend for stock exchanges to demutualize, where the members sell their shares in an initial public offering. In this way the mutual organization becomes a corporation, with shares that are listed on a stock exchange. Examples are Australian Securities Exchange (1998), Euronext (merged with New York Stock Exchange), NASDAQ (2002), the New York Stock Exchange (2005), Bolsas y Mercados Españoles, and the São Paulo Stock Exchange (2007). The Shenzhen and Shanghai stock exchanges can been characterized as quasi-state institutions insofar as they were created by government bodies in China and their leading personnel are directly appointed by the China Securities Regulatory Commission.
Old share certificates.
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Events.
The exchange was closed shortly after the beginning of World War I (July 1914), but it re-opened on November 28 of that year in order to help the war effort by trading bonds.
On September 16, 1920, a bomb exploded on Wall Street outside the NYSE building, killing 33 people and injuring more than 400. The perpetrators were never found. The NYSE building and some buildings nearby, such as the JP Morgan building, still have marks on their facades caused by the bombing.
The Black Thursday crash of the Exchange on October 24, 1929, and the sell-off panic which started on Black Tuesday, October 29, are often blamed for precipitating the Great Depression of 1929. In an effort to try to restore investor confidence, the Exchange unveiled a fifteen-point program aimed to upgrade protection for the investing public on October 31, 1938.
On October 1, 1934, the exchange was registered as a national securities exchange with the U.S. Securities and Exchange Commission, with a president and a thirty-three member board. On February 18, 1971 the non-profit corporation was formed, and the number of board members was reduced to twenty-five.
On October 19, 1987, the Dow Jones Industrial Average (DJIA) dropped 508 points, a 22.6% loss in a single day, the biggest one-day drop the exchange had yet experienced, prompting officials at the exchange to invoke for the first time the "circuit breaker" rule to halt all trading. This was a very controversial move and led to a quick change in the rule; trading now halts for an hour, two hours, or the rest of the day when the DJIA drops 10, 20, or 30 percent, respectively. In the afternoon, the 10% and 20% drops will halt trading for a shorter period of time, but a 30% drop will always close the exchange for the day. The rationale behind the trading halt was to give investors a chance to cool off and reevaluate their positions. Black Monday was followed by Terrible Tuesday, a day in which the Exchange's systems did not perform well and some people had difficulty completing their trades.Further information: Black Monday (1987)
There was a panic similar to many with a fall of 7.2% in value (554.26 points) on October 27, 1997 prompted by falls in Asian markets, from which the NYSE recovered quickly.Further information: October 27, 1997 mini-crash
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Chapter No. 3
On January 26, 2000, an altercation during filming of the music video for Sleep Now in the Fire, which was directed by Michael Moore, caused the doors of the exchange to be closed and the band, Rage Against the Machine, to be escorted from the site by security,[11] after band members attempted to gain entry into the exchange.[12] Trading on the exchange floor, however, continued uninterrupted.[13]
The NYSE was closed from September 11 until September 17, 2001 as a result of the September 11, 2001 attacks.
On September 17, 2003, NYSE chairman and chief executive Richard Grasso stepped down as a result of controversy concerning the size of his deferred compensation package. He was replaced as CEO by John S. Reed, the former Chairman of Citigroup.
The NYSE announced its plans to acquire Archipelago on April 21, 2005, in a deal intended to reorganize the NYSE as a publicly traded company. NYSE's governing board voted to acquire rival Archipelago on December 6, 2005, and become a for-profit, public company. It began trading under the name NYSE Group on March 8, 2006. A little over one year later, on April 4, 2007, the NYSE Group completed its merger with Euronext, the European combined stock market, thus forming the NYSE Euronext, the first transatlantic stock exchange.
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Hot event.
Subject: NYSE Euronext Completes Acquisition of AMEX
Highlights:• AMEX Acquisition closed on October 1, 2008• AMEX equities exchange to be called “NYSE Alternext”• AMEX options market to be called “NYSE AMEX Options”• Acquisition will complement equities business and allow NYSE Euronext to offer choice in options market structure
Action: This is an announcement notice; there is no action necessary.
Summary:We are pleased to announce that the acquisition of the American Stock
Exchange (AMEX) by NYSE Euronext was completed. This historic transaction not only brings a new exchange into the NYSE Euronext family but increases our scale in U.S. options trading, exchange traded funds (ETFs), closed-end funds, structuredproducts and cash equities markets. Moving forward, the equities exchange will be called “NYSE Alternext” and the options market will be called“NYSE AMEX Options”. Both will trade on the former AMEX SRO, which had been renamed NYSE AlternextUS.
In the U.S., NYSE Euronext will operate three equities markets – NYSE, NYSE Arca and NYSE Alternextoffering choice in market structure and trading products. As we had previously announced, equities tradingon Amex/AEMI systems and floor will transition to NYSE systems and floor in early December. The migrationof Exchange Traded Products (ETFs, ETNs, ILNs, etc.) from the Amex/AEMI system to NYSE Arca or otherexchanges is expected to occur in stages and be fully completed at the end of November. You will receiveregular notices and web postings with details by symbol on the migration.NYSE Euronext’s U.S. options business will operate a dual market structure, making available to allcustomers the choice of price-time priority on NYSE Arca and the Amex’s traditional market-maker model.Amex options technology will be transitioned to NYSE Arca-based technology and the Amex options floor willbe relocated to a new location adjacent to the NYSE equities trading floor in February 2009.
NYSE Euronext paid $260 million in common stock for the 166-year-old market. Amex members are also entitled to additional NYSE Euronext common shares based on net proceeds, if any, from the expected sale of Amex’s lower Manhattan headquarters. Renamed NYSE Alternext US LLC, Amex is now a wholly owned
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subsidiary of NYSE Group. The transaction, which has been approved by Amex members and U.S. regulators, is expected to be accretive to earnings in 2009.
The company expects to realize annualized cost synergies (from technology, data center and staff integration, as well as service and vendor consolidation) of $100 million by the end of 2009. All of Amex’s equity trading floor operations, including floor traders and designated market makers (DMMs), previously known as specialists, will move to the NYSE’s Wall Street trading floor facilities in December, and the remaining options trading operations and staff will follow in February 2009.
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The role of stock exchanges
Stock exchanges have multiple roles in the economy, this may include the following:
Raising capital for businesses
The Stock Exchange provides companies with the facility to raise capital for expansion through selling shares to the investing public.
Mobilizing savings for investment
When people draw their savings and invest in shares, it leads to a more rational allocation of resources because funds, which could have been consumed, or kept in idle deposits with banks, are mobilized and redirected to promote business activity with benefits for several economic sectors such as agriculture, commerce and industry, resulting in stronger economic growth and higher productivity levels and firms.
Facilitating company growth
Companies view acquisitions as an opportunity to expand product lines, increase distribution channels, hedge against volatility, increase its market share, or acquire other necessary business assets. A takeover bid or a merger agreement through the stock market is one of the simplest and most common ways for a company to grow by acquisition or fusion.
Redistribution of wealth
Stocks exchanges do not exist to redistribute wealth. However, both casual and professional stock investors, through dividends and stock price increases that may result in capital gains, will share in the wealth of profitable businesses.
Corporate governance
By having a wide and varied scope of owners, companies generally tend to improve on their management standards and efficiency in order to satisfy the demands of these shareholders and the more stringent rules for public corporations imposed by public stock exchanges and the government. Consequently, it is alleged that public companies (companies that are owned by shareholders who are members of the general public and trade shares on public exchanges) tend to have better management records than privately-held companies (those companies where shares are not publicly traded, often owned by the company founders and/or their families and heirs, or otherwise by a small group of investors).
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Chapter No. 4
However, some well-documented cases are known where it is alleged that there has been considerable slippage in corporate governance on the part of some public companies. The dot-com bubble in the early 2000s, and the subprime mortgage crisis in 2007-08, are classical examples of corporate mismanagement. Companies like Pets.com (2000), Enron Corporation (2001), One.Tel (2001), Sunbeam (2001), Webvan (2001), Adelphia (2002), MCI WorldCom (2002), Parmalat (2003), Fannie Mae (2008), Freddie Mac (2008), Lehman Brothers (2008), were among the most widely scrutinized by the media.
Creating investment opportunities for small investors
As opposed to other businesses that require huge capital outlay, investing in shares is open to both the large and small stock investors because a person buys the number of shares they can afford. Therefore the Stock Exchange provides the opportunity for small investors to own shares of the same companies as large investors.
Government capital-raising for development projects
Governments at various levels may decide to borrow money in order to finance infrastructure projects such as sewage and water treatment works or housing estates by selling another category of securities known as bonds. These bonds can be raised through the Stock Exchange whereby members of the public buy them, thus loaning money to the government. The issuance of such bonds can obviate the need to directly tax the citizens in order to finance development, although by securing such bonds with the full faith and credit of the government instead of with collateral, the result is that the government must tax the citizens or otherwise raise additional funds to make any regular coupon payments and refund the principal when the bonds mature.
Barometer of the economy
At the stock exchange, share prices rise and fall depending, largely, on market forces. Share prices tend to rise or remain stable when companies and the economy in general show signs of stability and growth. An economic recession, depression, or financial crisis could eventually lead to a stock market crash. Therefore the movement of share prices and in general of the stock indexes can be an indicator of the general trend in the economy.
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Management of New York Stock Exchange.
Chief Executive Officer
DUNCAN L. NIEDERAUER
Duncan L. Niederauer is Chief Executive Officer of NYSE Euronext. He is a member of the company’s Management Committee and also serves on the Board of Directors. Prior to his current position, Mr. Niederauer was head of U.S. cash equities.
Before joining NYSE Euronext in April 2007, he was Managing Director and co-Head of the Equities Division Execution Services for Goldman Sachs & Co. He joined Goldman in 1985 and moved to the Equities Division in 1987. In 2000, Mr. Niederauer relocated to the headquarters of Spear, Leeds & Kellogg, where he managed the firm’s global clearing and execution business. He also ran the Equities E-Commerce effort, and was the global head of portfolio trading and spent time in Tokyo in Derivatives and Japanese products.
He earned an MBA from Emory University and a BA from Colgate University , where he currently serves on the Board of Trustees.
Board of directors.
The NYSE Euronext Board of Directors, elected annually, is comprised of a majority of independent directors, an independent, non-executive chairman and deputy chairman, and the chief executive officer and deputy chief executive officer of NYSE Euronext.
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Chapter No. 5
Chairman
Jan-Michiel Hessels
Chairman of the Board of Directors
Mr. Hessels is the chairman of the Board of NYSE Euronext, and he has been the chairman of the supervisory board of Euronext N.V. since its creation in September 2000.
Deputy Chairman
Marsh Carter
Marshall N. Carter is the deputy chairman of the Board of NYSE Euronext, and he has served as chairman of the Board of Directors of NYSE Group, Inc. and its predecessor, the New York Stock Exchange, since April 7, 2005. Mr. Carter, 65, has been a director since December 2003.
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Board of Directors
Duncan L. Niederauer (Chief Executive Officer)
Jean-François Théodore (Deputy Chief Executive Officer)
Ellyn L. Brown
Sir George Cox
William E. Ford
Sylvain Hefes
Dominique Hoenn
Shirley Ann Jackson
James S. McDonald
Duncan M. McFarland
James J. McNulty
Baron Jean Peterbroeck
Alice M. Rivlin
Ricardo Salgado
Rijnhard van Tets
Sir Brian Williamson
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Brokerage & company listing
Requirments to become a Broker.
In order to become a stockbroker in the United States, a candidate must pass the General Securities Representative Examination (also known as the "Series 7 exam").
The General Securities Representative Exam, commonly referred to as the Series 7 Exam, is a required exam to become a Registered Representative of a broker-dealer in the United States.
The exam is a six-hour, 260 question test (250 of which count towards the final score) that is owned and maintained by the National Association of Securities Dealers (NASD) and administered by the self-regulating Financial Industry Regulatory Authority (FINRA), which covers a broad range of investments including stocks, bonds, options, limited partnerships, and investment company products (e.g., open- and closed-end funds). A candidate must answer 70% of the questions correctly in order to pass. Upon passing the test, one is granted a Series 7 / General Securities license. The series 7 license is the most comprehensive of several securities licenses that permit an agent to communicate with retail investors. For this reason, many account managers, analysts, and other executives in the employ of a registered Broker/Dealer hold Series 7 licenses. To satisfy the securities dealing requirements of some states, Series 7 license holders must also hold the Series 63 license or the Series 66 license, depending on that state the licensee works in and the state his/her clients reside in.
Stockbroking service.
A stock broker or stockbroker is a regulated professional who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors.
A transaction on a stock exchange must be made between two members of the exchange — an ordinary person may not walk into the New York Stock Exchange (for example), and ask to trade stock. Such an exchange must be done through a broker.
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Chapter No. 6
There are three types of stockbroking service.
Execution-only, which means that the broker will only carry out the client's instructions to buy or sell.
Advisory dealing, where the broker advises the client on which shares to buy and sell, but leaves the final decision to the investor.
Discretionary dealing, where the stockbroker ascertains the client's investment objectives and then makes all dealing decisions on the client's behalf.
In addition to actually trading stocks for their clients, stock brokers may also offer advice to their clients on which stocks, mutual funds, etc. to buy.
Famous stock brokers
Larry "Buster" Crabbe Brian Dennehy Jerry Doyle Christopher Gardner Paul Gauguin Edward Francis Hutton Jérôme Kerviel Nick Leeson. Michael Milken George Murphy William A. Paine Hemish Shah Martha Stewart John Vernou Bouvier Lexington Steele
Requirements for listing in NYSE Euronext.
In order to be listed on the Exchange, warrants must be issued to purchase a security that is already listed or that will be listed concurrent with the warrants. The warrant holder shall not be entitled to any privileges of the holder of common stock (e.g. dividends, preemptive rights or voting rights).
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If the warrants are exercisable into listed common stock, the listing of the warrants and the underlying common stock is subject to the NYSE shareholder approval policy.
Warrants must be issued as fully registered instruments. They must be issued in a form approved by the Exchange, and transferable, exercisable, payable and deliverable in the Borough of Manhattan, in the City of New York.
The terms of the warrants should include the usual anti-dilution provisions protecting the warrant holder.
(A) Standards for Listing
1,000,000 warrants outstanding.
At least 400 holders.
At least $4 million aggregate market value.
Warrants should have a minimum life of one year, and an aggregate market value of at least $4 million. In reviewing the eligibility for listing of warrants, the Exchange will also take into consideration certain other factors including the relationship between the exercise price of the warrants and the price of the underlying security at the time of issuance; and the proportion of the issuer's total equity that all issues of warrants represent. (Note: Prior to Dec. 1992, the Exchange stated that the warrant exercise price must not be "substantially" — not greater than approximately 25% — above market price. In addition, the Exchange would not list warrants where a new warrant issue would result in more than 50% of a company's common stock being represented in warrant form.)
While the standards outlined herein are generally determinative on the question of eligibility for listing, the Exchange can, where circumstances warrant, take into consideration these and other factors which could have a bearing on the warrant holder's ultimate expectation of exercising his warrant. This could include, but is not limited to, the issuer's relative stability and position in its industry, whether it is engaged in an expanding industry with prospects of maintaining its position, the degree of national interest in the company, whether the security to which the warrant is attached at the time of issuance can be used as consideration in exercising the warrant, etc.
Also, the Exchange normally refuses to list warrants issued in connection with other securities which do not meet Exchange listing requirements. The terms of the warrants must not give the company the right to reduce the established price of the warrant for periods of time, or from time to time, during the life of the warrants. Finally, the Exchange strongly recommends that each warrant have a residual value at expiration. The value could take the form of a monetary value or security value, e.g., 100 warrants entitles a holder to one share of common stock or some other security.
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(B) Filing a Listing Application Relating to Warrants
The general instructions for preparation and filing of a listing application are described in Para. 703. 01.The listing application format is presented in Para. 903.02.
(C) Supporting Documents
The following documents, as applicable, must be filed in support of the listing application:
Timetable (if requested) — include proposed date of effectiveness and closing date. If warrants are part of unit offering date they are detachable. Such information may be referenced in a cover letter which accompanies the application.
Copies of opinions of counsel filed in connection with recent public offerings or, if no opinions of counsel exist, a certificate of good standing from the company’s jurisdiction of incorporation.
Prospectus—4 copies each of preliminary and final.
Document setting forth definitive terms of warrants.
Specimen of warrant certificates.
Current form of Listing Fee Agreement (if not previously filed). (See Para. 902.01.)
Current form of Listing Agreement (if not previously filed). (See Para. 901.00.)
Registration statement under the Securities Exchange Act of 1934. In lieu of signed copy Company may submit registration statement as filed via EDGAR. Include a statement to the effect that the registration statement, as submitted, is a true and complete copy of that which has been filed with the Securities and Exchange Commission.
Indemnification Agreement. (See Para 501.05).
Notice of availability of warrant certificates.
Distribution information.
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Listed companies.
NYSE Euronext's nearly 4,400 listed companies represent a combined $30.3 / €18.3 trillion in total global market capitalization (as of Dec. 31, 2008), more than four times that of any other exchange group. NYSE Euronext's equity exchanges transact an average daily trading value of approximately $169.6 / €113.2 billion which represents more than one-third of the world's cash equities trading.
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Future of stock exchange.
The future of stock trading appears to be electronic, as competition is continually growing between the remaining traditional New York Stock Exchange specialist system against the relatively new, all Electronic Communications Networks, or ECNs. ECNs point to their speedy execution of large block trades, while specialist system proponents cite the role of specialists in maintaining orderly markets, especially under extraordinary conditions or for special types of orders.
The ECNs contend that an array of special interests profit at the expense of investors in even the most mundane exchange-directed trades. Machine-based systems, they argue, are much more efficient, because they speed up the execution mechanism and eliminate the need to deal with an intermediary.
Historically, the 'market' (which, as noted, encompasses the totality of stock trading on all exchanges) has been slow to respond to technological innovation, thus allowing growing pure speculation to continue. Conversion to all-electronic trading could erode/eliminate the trading profits of floor specialists and the NYSE's "upstairs traders", who, like in September and October 2008, earned billions of dollars selling shares they did not have, and days later buying the same amount of shares, but maybe 15 % cheaper, so these shares could be handed to their buyers, thereby making the market fall deeply.
William Lupien, founder of the Instinet trading system and the OptiMark system, has been quoted as saying "I'd definitely say the ECNs are winning... Things happen awfully fast once you reach the tipping point. We're now at the tipping point."
One example of improved efficiency of ECNs is the prevention of front running, by which manual Wall Street traders use knowledge of a customer's incoming order to place their own orders so as to benefit from the perceived change to market direction that the introduction of a large order will cause. By executing large trades at lightning speed without manual intervention, ECNs make impossible this illegal practice, for which several NYSE floor brokers were investigated and severely fined in recent years.[6] Under the specialist system, when the market sees a large trade in a name, other buyers are immediately able to look to see how big the trader is in the name, and make inferences about why s/he is selling or buying. All traders who are quick enough are able to use that information to anticipate price movements.
ECNs have changed ordinary stock transaction processing (like brokerage services before them) into a commodity-type business. ECNs could regulate the fairness of initial public offerings (IPOs), oversee Hambrecht's OpenIPO process, or measure the effectiveness of securities research and use transaction fees to subsidize small- and mid-cap research efforts.
28 NYSE GROUP
Chapter No. 7
Some however, believe the answer will be some combination of the best of technology and "upstairs trading" — in other words, a hybrid model.
Trading 25,000 shares of General Electric stock quote: $34.76; recent volume: 44,760,300) would be a relatively simple e-commerce transaction; trading 100 shares of Berkshire Hathaway Class A stock (recent quote: $139,700.00; recent volume: 850) may never be. The choice of system should be clear (but always that of the trader), based on the characteristics of the security to be traded.
Even with ECNs forming an important part of a national market system, opportunities presumably remain to profit from the spread between the bid and offer price. That is especially true for investment managers that direct huge trading volume, and own a stake in an ECN or specialist firm. For example, in its individual stock-brokerage accounts, "Fidelity Investments runs 29% of its undesignated orders in NYSE-listed stocks, and 37% of its undesignated market orders through the Boston Stock Exchange, where an affiliate controls a specialist post."
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29 NYSE GROUP
References
www.nyse.com
www.euronext.com
www.amex.com
www.wikipedia.com
www.google.com/images
www.yahoo.com/images
Nyse euronext guide
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30 NYSE GROUP
