Big Board Puts Earlier Trading Start on Hold : Markets: The pullback by the New York Stock Exchange is seen as a victory for brokers on the West Coast.
Surprised by fierce opposition from throughout the country, the New York Stock Exchange said Monday that it will indefinitely delay its plan to start trading half an hour earlier, pending further study.
The plan to open daily Big Board trading at 9 a.m. Eastern time was to have gone into effect Sept. 9. The stock exchange said it will delay seeking SEC approval for the earlier opening.
The pullback was viewed as a victory for West Coast brokers, who were concerned that they would have to rise in time to be at their desks by 6 a.m. San Francisco-based Montgomery Securities played a big role in organizing the protest, which came to include more than 200 brokerage firms nationwide, as well as three exchanges--the National Assn. of Securities Dealers, the Pacific Stock Exchange and the Chicago Board Options Exchange.
The reversal, even if only temporary, may be a sign of the NYSE’s eroding political power within the brokerage community as computerized trading in the over-the-counter market and competition from other exchanges continues to threaten the Big Board.
The NYSE had said the earlier opening was necessary to remain competitive with foreign stock exchanges and to encourage foreign firms to list their stocks on the Big Board. NYSE Chairman and Chief Executive William H. Donaldson said in a statement that the decision to put off the move was made because “a number of interested parties have asked for more time to evaluate the plan.”
In an interview, however, Donaldson said Monday that he expects that the NYSE will soon be able to persuade the great majority of its member firms to go along with the idea. He asserted that the opposition was mainly fomented among rank-and-file brokers and mid-level employees concerned about earlier working hours.
Donaldson said that more than half of the exchange’s member firms support the earlier opening, and he believes that chief executives of the other firms can be persuaded that it is a good idea.
“We’re really talking about half an hour,” he said. “We’re not talking about a revolution.” He said no timetable had been set for additional study, but added: “We’re talking about a matter of months and not years.”
The American Stock Exchange has scheduled a vote by its board on a “contingency plan” to open trading at 9 a.m. But it said in a written statement Monday that there are “no plans to seek approval” of an early opening. The Amex will extend its trading hours Monday--by adding an hour to the end of the day instead of adding 30 minutes to the start.
Montgomery Securities had organized a petition drive among NYSE member brokerage firms opposed to the earlier opening. The firm earlier said it obtained more than enough signatures to force a special meeting of NYSE membership to consider an amendment to the Big Board’s constitution on opening hours.
Jack G. Levin, managing director for legal affairs at Montgomery, said: “We are gratified that the leadership has heard the membership and decided to reconsider.” He said Montgomery will delay filing the petition pending the outcome of the Big Board’s review.
Opponents said they weren’t concerned about merely having to get up earlier in the morning. Many claimed that the longer trading day would increase their costs without generating much new business. Some also claimed that the earlier hours would work against West Coast investors.
