The US Securities and Exchange Commission has approved the rules for NYSE MatchPoint, a new, portfolio-based, point-in-time electronic facility of the New York Stock Exchange that matches aggregated orders at predetermined sessions throughout regular hours and after hours of the exchange. MatchPoint will trade securities listed on all major and regional US stock exchanges. It is expected to begin operation on January 22, 2008.
“[NYSE MatchPoint] is unique in the exchange environment due to its portfolio-based approach,” says Lawrence Leibowitz, head of US products, NYSE Euronext. “By offering MatchPoint and our recently-announced joint venture with BIDS, we’re providing investors two new, complementary ways to trade block orders.”
The first NYSE MatchPoint matching session will be an after-hours match at 16:45 that uses the official closing price of the primary market. Soon, matching sessions will be established during regular hours of the exchange. The first will take place at 09:45, followed by matching sessions at 10:00, 11:00, 12:00, 13:00. 14:00 and 15:00. The price of the intraday match will be the mid-point of the NBBO that is randomly selected during a one-minute pricing period. An investor may enter one portfolio of buy and sell/short orders, a single block order or multiple portfolios of buy and sell/short orders.
NYSE Euronext believes investors that rely on index-based or model-driven trading and investment strategies will find NYSE MatchPoint’s portfolio-based capabilities very effective. In addition, the firm argues that NYSE MatchPoint’s non-displayed, point-in-time approach aggregates individual block orders, increases the depth of the liquidity pool and enhances the opportunity of a natural match.
The company expects MatchPoint to attract broad participation from broker/dealers, as well as institutions and hedge funds through broker sponsorship.