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NYSE acquires National Stock Exchange

First Published 15th December 2016

Largest US exchange swallows smallest US exchange.

Struggling exchange operator NSX (National Stock Exchange... a rather misleading name) has been acquired by the behemoth exchange NYSE ICE. The exchange had been failing to make ends meet recently and had actually announced that it would close its doors on December 16. This fate seems to be averted for now.

NSX is by far the smallest exchange in the US, processing a negligible 8,700 trades yesterday (which was FOMC day... The NYSE group of exchanges concluded about 8.5 million trades).

The NSX is not without its value, however. It has a license to operate as a National Securities Exchange (yes, more terms with the word "National" in it!) which avoids all sorts of regulatory headaches for someone trying to obtain said license. Regular readers may recall the 1 year Odyssey that IEX had to embark on to get approval from the SEC.

NYSE will likely use the NSX license to trial different pricing or market models (think: speed bumps?) to see if this can be built into something that can garner momentum. If the new NSX can gather more market share than its current 0.02% (by USD volumes traded) then it could provide a useful platform for trying out new concepts without disrupting NYSE's current ecosystem.

NSX will not list securities. Unlike the other exchanges under the NYSE brand (NYSE, NYSE MKT, NYSE Arca Equities) which all offer listing services, NSX will simply operate as a trading venue.