The New York Stock Exchange is working to marshal Wall Street support for a plan that would overhaul features of the U.S. stock market that have drawn criticism from investors in the last year.
A draft proposal circulated by the NYSE among investors and brokers seeks a grand bargain across the industry, according to a person who saw it who asked not to be named. The arrangement would include curbs to keep most trades off private venues such as dark pools and agreements by exchanges to cut trading fees and stop an incentive system known as maker-taker.
The NYSE hopes to win enough support to take the plan to regulators for formal approval, according to brokers who have spoken to exchange officials. Credit Suisse Group, which runs the biggest U.S. dark pool, backs the NYSE proposal, according to people familiar with the matter. Spokesmen for NYSE parent Intercontinental Exchange Inc. and Credit Suisse declined to comment.
Intercontinental Exchange bought the NYSE's parent company a year ago, and ever since Chief Executive Jeffrey Sprecher has promoted ending the status quo in the $23-trillion U.S. equity market. The three stock exchanges that ICE owns handle about one-fifth of U.S. equity volume. Exchanges owned by Nasdaq OMX Group Inc. and Bats Global Markets Inc. handle roughly the same amount, while close to 40% of volume takes place on private venues such as dark pools.
That network of trading platforms could be simplified by the NYSE plan. The proposed curbs on trading in dark pools, known as a trade-at rule, would keep most routine stock trades on exchanges, where bids and offers for shares are public. Critics contend that having dozens of trading platforms makes the market too complicated and opaque.
Spurred by regulatory changes, the NYSE has lost its grip on U.S. trading. A decade ago, it handled about 80% of trading in the corporations it listed. Nasdaq has also seen its market share dwindle.