NYSE Stock Exchange. New York Stock Exchange
Many readers probably have the concept “ American stock exchange"is associated with those images that are captured in many American feature films, literature and news feeds of news agencies. Mostly, this image looks like some kind of place where the capitalists and oligarchs of the whole world make huge money day and night on their Wall Street, and because of them all the troubles in the world economy, the exploitation of the proletariat and everything in the same spirit.
In reality, of course, everything is not quite like that. The largest stock exchange in the United States and the world, called the New York Stock Exchange, or New York Stock Exchange (NYSE), has a total capitalization of its listed companies of more than 19 trillion. dollars, with an average daily trading turnover of 200-250 billion dollars (only for the stock section, not including the foreign exchange derivatives market and others). There are also large US stock exchanges, for example, such as the Philadelphia, Chicago Derivatives Exchange or the NSE's closest competitor, the American Amex Stock Exchange.
But nevertheless, the priority remains with the National Stock Exchange, since Wall Street is a system that has been built for more than 200 years and has unquestioned authority throughout the global financial and business world.
The trading platform itself is located on Wall Street 11, in a building built at the very beginning of the 20th century. The building itself contains 21 special rooms, or trading floors, equipped with the latest technology means of communication, trading terminals, and displays. Trading on the American Stock Exchange always begins with the traditional ringing of the bell at 9:30 am and ends at 4:00 pm also with the striking of this bell.
There are 4 of them in total (for each trading section) and they are located in different rooms. Of course, now trading takes place for the most part through electronic trading platforms, but tribute to tradition, memory and respect for those who stood at the origins is still carefully preserved by traders of the 21st century.
The New York Stock Exchange, whose official website is www.NYSE.com, also has representative offices in many international financial institutions and Associations. Since 2007, the NYSE began to work together with the European platform EURONEXT under the overall management of the exchange holding company Intercontinental Exchange, headquartered in New York. Currently, the general manager of the united exchange platform is Thomas Farley.
Trading on the American stock exchange is directly regulated by a special government organization, the SEC. In addition, there are a wide variety of laws regarding stock exchanges in the United States, one of the most severe, for example, is the “insider trading law.”
Brief historical background
But still, the first stock exchange in the United States began its activities a little earlier. It was an auction site where farmers and wholesale buyers made transactions for wheat, cotton, tobacco and other agricultural products. This auction in 1792 became known as the “Buttonwood Agreement” and in fact it was the first US law on the stock exchange, which was semi-official in nature. In 1817, auction stockbrokers decided to unite all types of transactions under one brand - the New York Stock and Exchange Board, and it was located on the premises of the Tontine Coffee House trading house.
Trading on the US stock exchange began to take on final and modern features only after the 1st World War. But already in the infamous 1929, the most dramatic event of all took place. new story crash on the National Welfare Fund. On October 24, 1929 (Black Thursday), the market crashed, and quotes on the New York Stock Exchange lost tens of percent in just one day, which marked the beginning of the Great Depression, which lasted until 1938.
There were no such “flash crashes” later, but there were moments when there was serious panic on Wall Street, for example:
- 1971(oil crisis)
- 1997 –Asian crisis
- 2001 September 11– terrorist attack on the Twin Towers
- 2010– a short-term collapse of the Dow index by 988 points. This incident occurred due to the incorrect position of one large brokerage house.
After this, government supervisory authorities (SEC and CFTC) introduced a provision into the US Securities Exchange Act, which stated the right of the trading platform to suspend trading in futures instruments in the event of strong price movements that are not motivated by the market.
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General characteristics of the American market and trading on US stock exchanges
The main characteristic of trading operations is their adherence (even despite the presence of electronic trading platforms) to the old traditions of auctions. These trading auctions take place in the so-called “exchange pit” or trading floor.
At the same time, a broker on the American stock exchange is not only just a technical intermediary, but also plays the role of an auctioneer in favor of his client (buyer or seller), actively trading up or down depending on the agreements. Even after introduction electronic system in 1995, until 2007, there was a hybrid trading system, where the same broker could work in different formats.
Trading on the US stock exchange is not only profitable, but also prestigious. American stock exchange brokers pay huge commissions for space on the trading floor, and on average, one such seat can cost at least hundreds of thousands of dollars a month. Naturally, in order to pay such commissions, the brokerage turnover on the New York Stock Exchange must reach tens of millions of dollars, which, in principle, is not a big deal given the demand from clients from all continents.
In addition, a broker for the American stock exchange is another important element in attracting clients for the initial placement of their shares. Moreover, they actively use American stock exchanges and Russian companies like this, for example, can be seen from the table presented.
Our companies are listed in the form of special depositary receipts. The US Securities Exchange Act allows foreign companies to list on their trading platforms, but the selection, auditing and listing process is very strict.
Receipts
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US stocks
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As for the American market itself, again, as can be seen from the table and graph of the main Dow Jones Industrial Index, the situation is in many ways reminiscent of the beginning of 2008, when there are no new drivers for growth (and the market has stood still for almost a year at its highs , and there are no new reasons for the fall yet (or they have not yet been invented). Most likely, closer to the US presidential elections, the global investment community will again see what a financial crisis is, because even now it is clear that the pillars of the American economy are trading more in the red zone, than in green - i.e. they are simply sold.
Here it is also worth saying a few words about the main indices of American stock exchanges:
- Dow Jones Index (1897)– calculated based on the weighted average of 30 leading companies across the entire industrial and business spectrum of the country. This list is periodically revised.
- S&P 500, or the broad market index (in trading slang - “spike” or “husky”) also covers all sectors of the economy, but on a larger statistical basis - 500 issuing companies. It is the one that is more preferable for market analysis.
- Nasdaq– a special index of the high-tech industry sector. It includes data on venture capital and emerging investment companies.
As a conclusion and recommendation. It is natural to believe that many are of little interest in what is happening somewhere on the exchanges of another continent. However, everything that happens on the world's stock exchanges is a direct reflection of processes that in one way or another affect the life of almost every person on the planet.
And even basic knowledge about these things can not only broaden your horizons, but add something for the practical side of your activity or in real business.
The New York Stock Exchange (NYSE) is the main US stock exchange, the largest in the world in terms of turnover. She is a symbol of the financial power of the United States and the financial industry in general.
The New York Stock Exchange is the largest in the world in terms of capitalization; more than 60% of the shares of the world's largest companies are concentrated on it. NYSE is the most liquid, i.e. the speed with which an operation can be carried out, be it a purchase, a sale, or a bearish game, is measured in fractions of a second; the exchange is least susceptible to sharp fluctuations in stock prices.
More than 3,500 corporations from around the world are listed on the New York Stock Exchange. It defines the world famous Dow index-Jones for shares of industrial companies (English: Dow Jones Industrial Average).
The New York Stock Exchange building is located on the famous Wall Street. The NYSE trading floor consists of four trading floors used to facilitate trading. The fifth storefront, located at 30 Broad Street, closed in February 2007. The main room is where trading opens and closes, while the rest provide brokers with a space of more than 48 thousand square meters. ft. The NYSE stock exchange ranks first in the world in terms of trading volume and second in the number of companies listed.
Now the New York Stock Exchange is a family of exchange platforms located in six countries around the world. In addition to the main site on Wall Street, it also includes:
NYSE Euronext - largest cash market valuable papers Eurozone,
NYSE Alternext is a pan-European market with a focus on emerging market companies.
The NYSE has always actively opposed any government interference in its activities, has always tried to maintain its status as a “closed club” and has defended regulation of the exchange’s activities by the exchange’s members themselves. But, despite this, two areas of regulation have emerged - regulation by stockbrokers and the state.
History of the New York Stock Exchange
On May 17, 1792, twenty-four securities brokers signed an agreement to trade only with each other. It was called the "Sycamore Agreement" because it was signed under a sycamore tree in the Wall Street area where brokers met informally. This date is considered the founding day of the New York Stock Exchange.
In 1817, the constitution of the Board of the New York Stock Exchange was adopted.
In 1863, the stock exchange got its name - New York Stock Exchange (Nyse).
On October 1, 1934, the exchange was registered as a national stock exchange by the U.S. Securities and Exchange Commission.
In 1975, it became a non-profit corporation owned by its 1,366 individual members (this number has remained unchanged since 1953).
In 1977, foreign brokers were admitted to the NYSE.
In 2006, the merger of NYSE and ArcaEx created NYSE Arca and formed the publicly traded company NYSE Group, Inc;
in turn, NYSE Group merges with Euronext, creating the first transatlantic exchange group.
In early March 2006, the NYSE completed its merger with electronic exchange Archipelago Holdings and offered shares to investors for the first time in its history, thus becoming a commercial entity.
NYSE structure
The New York Stock Exchange is governed by a 27-member Board of Directors. Three, the chairman, executive vice chairman and president, serve ex-officio, while the remaining 24 are elected from among the exchange's active members for a two-year term. The Chairman is elected by the members of the Council and cannot be a member of the exchange or engage in brokerage or dealer operations. He appoints the president and other officers of the exchange. The 24 directors elected by the exchange members are divided equally into two categories:
- directors from companies involved in securities transactions,
- public directors who are not engaged in brokerage or dealer operations in securities.
The number of directors from securities firms must include seven representatives of firms that serve the general investor community, three specialists and one floor broker. Another director should represent a firm that does not have branches throughout the country, a “specialty” firm such as an arbitrage firm, or a small, highly specialized brokerage firm that conducts research. In addition, half of these directors represent publicly traded firms and must be affiliated with firms located outside of New York.
The NYSE also includes several international advisory committees. Their task is to develop the exchange, develop its policies and management methods.
Exchange members
Since 1975, the New York Stock Exchange has become a non-profit corporation owned by its 1,336 individual members. Members' seats can be sold, costing up to $3 million per seat, and also rented out to those who meet the exchange's requirements. Approximately a third of all places on the exchange are rented.
Based on the type of trading activity, NYSE members are divided into four categories: specialists; commission brokers; brokers on the exchange floor; stock broker. Of the exchange's 1,366 members, approximately 700 are commission brokers, 400 are specialists, 225 are floor brokers, and 41 are registered traders. This specialization is determined both by the volume of transactions carried out by certain members of the exchange and by the types of transactions.
Specialists work at retail locations. Their main function is the direct conclusion of contracts. Income is received through commission (if they act as brokers), or in the form of a spread (if they act as dealers).
Commission brokers execute trades on the trading floor and serve brokerage firms by executing orders from their clients.
Brokers on the floor of the exchange help other members of the exchange execute orders without the right to deal directly with outside clients.
Registered traders trade securities for their own account and are exempt from paying commissions.
Only individuals can be members of the exchange, but if a member of the exchange is a co-owner of a firm, the entire firm is also considered a member of the exchange. The dominant firms that are members of the New York Stock Exchange include several dozen investment banks, they have become key to the American stock market.
To become a member of the exchange, you need to buy a place from its current owner. In this case, a person applying for membership in the exchange must pass a written exam, have recommendations from two full members of the exchange and obtain the consent of the exchange. In addition, according to the charter of the exchange, its member must meet the age of “majority necessary to bear responsibility under contracts in the field of any business in which he is engaged.” Members pay initiation and annual fees to maintain their status.
Exchange activities
In 2014, the New York Stock Exchange ranked first in the ranking of stock exchanges in the world by capitalization. In this trading platform About 60% (over 300 billion) of the world's shares are listed. In 2013, more than 3,500 companies listed their shares on it, and their total capitalization amounted to 17 trillion US dollars. The NYSE is a prestigious place for companies with even the largest capitalization to list their shares. On the stock exchange, trading occurs not only in shares, but also in other securities. Being a member of the exchange is a real privilege.
The New York Stock Exchange solves the following problems:
- prepares premises for relevant business operations;
- provides working conditions for members, co-members and member organizations of the exchange;
- develops and implements fair trade principles;
- performs the functions of a chamber of commerce;
- performs the functions of an exchange;
- maintains a high level of commercial integrity among members and member organizations.
In general, the NYSE is a market instrument for accumulating temporarily available funds.
The New York Stock Exchange continually cooperates with various regulators and organizations, including the CFTC (Commodity Futures Trading Commission) and the Securities Exchange Commission.
NYSE LISTING
Listing is the inclusion of company shares in quotation lists. Listing on the NYSE gives companies access to significant financial sources. Virtually every major American company has listed there.
More than 3,500 companies were listed on the New York Stock Exchange, of which about 450 were foreign from 53 countries. Listed companies include both more reliable, stable companies, the so-called “Blue Chips”, and young, rapidly developing ones. New companies are included in the quotation lists after the public offering of their shares on the stock exchange. To be listed, companies must meet strict financial and legal requirements of the exchange. Listed companies must pay membership fee. Currently, the NYSE quotation list is being replenished largely due to the inclusion of shares of foreign companies in the listing.
To be listed on the New York Stock Exchange, you must have at least the following indicators:
Income before taxes for the last year was $2.7 million.
Profit for the previous 2 years - $3.0 million.
Net tangible assets: $18.0 million.
The number of shares in public ownership is $1.1 million.
The market value of the shares is $19.0 million.
The minimum number of shareholders owning 100 shares or more is at least 2 thousand.
The average monthly trading volume of shares of this issuer must be at least $100 thousand over the past 6 months.
To list its shares on the NYSE, a company must submit a request to the exchange. If it is accepted, the company sends a formal request, to which a positive response is given.
TRADING ON THE NEW YORK STOCK EXCHANGE
The NYSE is open for trading Monday through Friday from 9:30 a.m. to 4:00 p.m. Eastern Time, excluding previously announced holidays.
Exchange trading is conducted in the operating room, the size of which is approximately equal to a football field. Now the exchange floor is divided into 18 trading zones, and along the perimeter there is telephone and telegraph communication equipment, through which information about the purchase and sale of shares is transmitted from brokerage firms to the operating room and back. Each trading zone deals with certain types of shares. Bonds and less popular stocks are traded in the annex.
The process of trading securities on the NYSE takes place in the form of an auction, with each stock assigned a specific place on the trading floor. The trading floor is a “hellish” place, however, despite all the difficulties, order is maintained on the exchange, and all trading is periodically studied to identify significant violations.
Trading on the New York Stock Exchange is a huge anthill where participants practically stand in lines to place their bids. Exchange specialists execute orders from buyers and sellers, determining the price of the traded asset on the market in accordance with the laws of supply and demand. They occasionally (about 10% of the time) facilitate trading using equity, and disseminate information that helps bring in new buyers and sellers.
Individuals can carry out transactions on the stock exchange through brokers of a brokerage house. These brokers act as " financial consultants" and to carry out their business they must be licensed, pass a qualifying examination and be registered with the NYSE and the Securities and Exchange Commission.
Investor applications are forwarded from the brokerage house's head office to the floor brokers via sophisticated electronic communications and processing systems.
Specialists collect all orders from brokers on the floor for the purchase and sale of certain shares. Each share is serviced by a specialist who acts as an auctioneer and is located in a certain place on the trading floor of the exchange, which is called a trading post. All brokers - buyers and sellers for each stock - gather around the corresponding trading post. Brokers shout out their bids loudly - the competition of bids determines the price.
As of January 24, 2007, all stocks on the NYSE could be traded on the electronic hybrid market (with the exception of a small group of very high-value assets). Customers could now submit orders for immediate electronic execution, or route orders to the marketplace for trading on the auction market. In the first three months of 2007, over 82% of all orders were sent electronically.
The New York Stock Exchange, with state-of-the-art computers that could handle millions of shares a day, could develop a 24-hour trading system. But some exchange brokerage firms are in no hurry to prepare their own system. The administration is inclined to switch to round-the-clock trading due to the fact that exchanges around the world are developing new trading technologies to ensure interaction between buyers and sellers of various securities.
INCOME AND EXPENSES NYSE
The income and expenses of the New York Stock Exchange consist of:
- entrance fees for new members;
- membership fees;
- fees for transactions on the trading floor;
- fees for services and equipment;
- other fees.
The New York Stock Exchange is a powerful news generator and is engaged in serious publishing activities, sponsoring Scientific research and educational projects. It is also a tourist center and landmark of both the city and the country, a kind of financial symbol of the United States. This interest is used by the New York Stock Exchange to generate additional profits.
NYSE Indices
The most well-known stock indices are:
the Dow Jones Industrial Average, which is calculated using the prices of 30 blue-chip companies;
Standard & Poor's 500, which reflects the stock prices of the 500 largest companies;
The NYSE Composite Index, which includes all common stocks traded on the exchange, is the main indicator reflecting the situation in the market. It is also supplemented by various indices of individual industries.
NYSE Security System
Identifying unscrupulous market participants is one of the tasks of the exchange as a self-regulatory organization. No one regulates himself as strictly and thoroughly as stock market. Strict standards and requirements for professional participants trading, an extensive system of regulatory services - all these are measures of control over the activities of participants.
The Market Surveillance Service of the New York Stock Exchange investigates unusual trading situations - cases of trading using insider information, violations of trading rules, reporting rules, etc.
Buying a large number of shares before the share price has risen significantly is immediately recorded by the trading monitoring system. An investigation is being conducted to determine whether the people involved in the transaction are connected to the company whose shares were purchased or to people associated with that company.
Advantages and disadvantages of the New York Stock Exchange.
New York Stock Exchange (NYSE) is deservedly considered one of the important symbols of the impressive capabilities of the United States as a separate state and the power of the financial sector of the entire world economy.
Largely because of the New York Stock Exchange, many expressions associated with Wall Street have come into use, the street recognized as the historical value of the financial center of the city on which the stock exchange is located.
The content of the article:
NYSE is the largest stock exchange in the world in terms of most indicators, including the most important ones - the turnover of trades taking place on it and the capitalization of the companies represented. Today, almost two-thirds of transactions related to the stock market take place on the New York Stock Exchange.
NYSE (New York Stock Exchange)
NYSE is the New York stock exchange (USA), is the largest trading platform in the world, founded in 1868. It accounts for approximately 60% of all stock transactions in the world.
The listing includes shares of more than 4 thousand companies. The total capitalization of these enterprises significantly exceeds $28 trillion., which seriously exceeds that of any other stock exchange. The NYSE defines one of the world's most famous indices - the Dow Jones ( Dow Jones Index, DJ30).
- The New York Stock Exchange office is located at: USA, New York, Lower Manhattan, Wall Street, 11.
- Official site New York Stock Exchange NYSE: https://www.nyse.com/.
New York Stock Exchange opening hours
The New York Stock Exchange is open weekdays from 9:30 to 16:00 Eastern Standard Time (EST) in New York, or from 16:30 to 23:00 Moscow time.
In addition to two days off a week, the exchange also does not open at nine holidays per year, of which all interested parties are informed in advance.
For a long time, the signal about the beginning or end of trading was the sound of a hammer. Then it was replaced by the sound of a gong. After moving to a new building in 1903, a special bell is used as a gong, which rings at 9.30 and 16.00. The right to press the button that sets the striking mechanism of the bell in motion is often granted to famous people or even fictional characters ( Mickey Mouse, Pink Panther, etc.).
UN secretaries general opened or closed the NYSE at different times Ban Ki-moon (Ban Ki-moon) And Kofi Annan (Kofi Annan), greatest modern Olympian swimmer Michael Phelps (Michael Phelps), popular musicians group KISS And Snoop Dog (Snoop Dogg), politicians Nelson Mandela (Nelson Mandela) and mayor of New York Rudolph Giuliani (Rudolph Giuliani).
NYSE Owners
Owner of NYSE since 2013 ICE (Intercontinental Exchange) is an international network of stock and commodity exchanges operating in the USA, Europe and Canada.
The New York Stock Exchange is governed by a Board of Directors. It has 27 members, including a chairman, executive vice chairman and president. The remaining 24 seats on the Board are divided equally between 12 public representatives who are not brokers or dealers of the exchange and 12 executives of companies actively engaged in stock transactions. A certain role in the activities of the NYSE is played by international advisory committees involved in developing policies and strategies for the development of the exchange, as well as improving management methods.
The number of individual members of the exchange, equal to 1366, was determined in 1953 and has not changed since then. Since 1975, when the NYSE changed its status to become a non-profit organization, members of the exchange have become its sole owners. However, in 2006, the exchange itself entered the market by putting shares up for sale, thus redistributing ownership of property.
Exchange members include brokers, specialists and registered traders. A member's seat may be leased or sold. Moreover, the cost of one reaches up to 3 million dollars. About a third of all places are rented.
History of the New York Stock Exchange
Interior of the New York Stock Exchange. 1893 Over the more than two-century history of the New York Stock Exchange, many events have occurred that are in one way or another connected with the New York Stock Exchange.
Chronology
Today the New York Stock Exchange deservedly ranks among the largest financial institutions world, leading with a serious gap from competing structures both in capitalization and turnover of trades.
This became possible, among other things, thanks to several major mergers that have occurred in recent years. It should be noted that the global trend toward the consolidation of exchanges began to take shape in 2000.
Important mergers and acquisitions in recent years
The beginning of the process that led to the NYSE's leading position in the stock market was the merger of the exchange with an electronic platform ArcaEX (Archipelago Holdings), which happened in 2006. It was after this that shares of the company itself were put up for auction NYSE Group, which replaced the previously existing places on the exchange. Another important consequence of the merger was that from that time on the exchange used the so-called integrated sales system, combining both the traditional “ voice» option, and electronic trading using the system Archipelago.
The next notable merger was the merger in 2007 of the NYSE Group with the European exchange Euronext, uniting the largest trading floors in London, Paris, Amsterdam, Lisbon and Brussels. As a result, it is created NYSE Euronext, which has become the undoubted market leader.
- This is quite obvious, given that even before the merger, the NYSE and Euronext were respectively the 1st and 4th largest stock exchanges in the world in terms of sales.
Charging Bull - bronze statue on Wall Street. NYSE Euronext would have been in an even more serious position in 2012, when they submitted a bid to buy Frankfurt stock exchange Deutsche Borse AG, however, the European Commission blocked the merger of the group of companies. If this transaction is successfully completed, a de facto monopolist could emerge in the market. This is precisely what served as the reason for the EU regulatory authorities to block the unification. It is important to note that this was far from the only transaction that was banned in Europe and the United States during these years.
A logical consequence of the cessation of further consolidation was that already in 2013, NYSE Euronext itself became the target of a takeover, having been purchased by an international network of trading and stock exchanges ICE. As a result, NYSE and Euronext were again separated and began to operate as separate divisions, which undoubtedly increased competition in the market. However, this did not prevent the NYSE from remaining in first position in the ranking of stock exchanges both in terms of sales volume and capitalization.
NYSE functions
The New York Stock Exchange is undoubtedly complex organizational structure successfully performing many functions. These include:
- provision and preparation of premises for transactions on the stock market;
- providing working conditions for all members and participants of the exchange;
- development and implementation of fair and honest trade principles;
- performing direct functions and responsibilities of the chamber of commerce and stock exchange;
- control over legal literacy and compliance with commercial honor when making stock exchange transactions.
In more scientific terms, the NYSE is an important market instrument that ensures the accumulation and redistribution of temporarily free financial resources.
An important and one of the most important differences of the New York Stock Exchange is its serious trading tools, which is ensured by the fact that brokers have more than 8 thousand shares at their disposal. At the same time, the transparency of transactions is guaranteed, which is achieved by the ability to track the actions of traders online using specially developed applications.
Dow Jones Index
Index Dow Jones) is the oldest and most widely known NYSE index, which introduced Henry Charles Dow, founder of the Wall Street Joural in 1884.
Initially based on the index Dow Jones Transportation Average there were shares of 11 largest industrial and railroad companies in the United States. As the focus of America's most important businesses shifted to industry, the index changed its name to Dow Jones Industrial Average and included 12 companies.
Gradually, the number of enterprises included in the calculation formula grew and today it constitutes the 30 most important and significant companies in the United States.
The Dow Jones index almost always acts as the main litmus test when analyzing any major changes in the stock market, especially in cases where we are talking about collapses or growth in business activity.
NYSE Composite Index
A more complex formula for calculating this index includes the value of approximately 2 thousand shares of American and foreign companies, the total capitalization of which significantly exceeds 20 trillion. dollars.
As a result, the NYSE Composite Index provides more accurate and detailed stock market information than the Dow Jones Industrial Average.
Share listing on NYSE
Listing refers to the process of including shares in quotation lists. To date, this procedure has been completed on the New York Stock Exchange approximately 4.1 thousand companies, the vast majority of which - more than 3.5 thousand - are American.
The list of stocks on the NYSE includes almost all major US companies, with the exception of a few high-tech companies that prefer to cooperate with the second largest American stock exchange, NASDAQ.
Today, NASDAQ is the only serious competitor to the NYSE in the United States.
First large company from Russia, listed on the NYSE, became in 1996 " VimpelCom" Later, over the years, shares were listed on the New York stock exchange MTS, Mechel, Wimm-Bill-Dann and others.
To undergo the listing procedure and subsequent trading of shares on the NYSE, quite serious conditions must be met. For example, have a profit over the last two years of $3 million. in combination with income for the previous year of at least $2,7 million. In this case, the value of the assets owned by the applicant must be equal to or exceed $18 million.
The list of mandatory requirements is far from exhausted by the numbers listed. Despite this, the number of people wishing to be listed on the NYSE is not getting smaller. The reason for this is simple and logical - listing on the New York Stock Exchange provides easy and quick access to serious financial resources.
Back in 1700, shortly after the Declaration of Independence, there were only two types of securities that could be traded. These were government bonds and shares of the Bank of the United States, the first American bank.
Market brokers, traders and auctioneers bought and sold stocks and bonds in offices and cafes around the street Wall Street, located in the southern part of Manhattan. Without a predetermined place and time for trading, buyers and sellers had to find each other, so it took a long time to sell or buy shares.
Everything changed on May 17, 1792, when twenty-four brokers who traded securities on Wall Street signed an agreement to trade only with each other. It was called the "Sycamore Agreement" because it was signed under a sycamore tree in the Wall Street area where brokers met informally. This agreement provided the impetus for the creation of today's New York Stock Exchange.
Investor applications are forwarded from the brokerage house's head office to the floor brokers via sophisticated electronic communications and processing systems.
New York Exchange specialists
These are professional participants in the securities market who collect all orders from brokers on the floor for the purchase and sale of certain shares. Each share is serviced by a specialist who acts as an auctioneer and is located in a certain place on the trading floor of the exchange, which is called a trading post. All brokers - buyers and sellers for each stock - gather around the corresponding trading post. Brokers shout out their bids loudly - the competition of bids determines the price.
The number of shares traded by one specialist depends on the overall activity in the market. Above the trading post there is a display on which you can see various information on the stocks traded at this trading post.
About 95% of orders to buy or sell shares are sent directly to the trading post. However, this is only 65% of the total volume of transactions. The remaining 35% of trades are completed as a result of the execution of only 5% of orders received at the trading post from floor brokers who are located near the trading post in order to obtain the best price for the stock from a specialist.
American dream
About 80 million Americans invest their savings in stocks. This market has historically provided the highest return on investment over the long term.
To trade stocks, an investor opens an account with a brokerage company and begins trading via the Internet or by telephone. By logging into his trading account online, an investor can see a list of stocks traded on the exchange and their prices. Having decided to buy/sell a particular stock, the investor sends an order (order) to his broker, who in turn forwards it to the exchange.
There are several types of orders:
— Market orders— these orders make it possible to perform a purchase/sale operation of shares at the current market price. The investor makes a request to the broker to buy or sell “at the market”;
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— in these orders the prices differ from the current market prices. The investor sets the price at which he would like to buy/sell shares. Unlike market orders, which are executed immediately after they are placed, limit orders may not be executed—the stock price may not reach the level specified in the order. Limit orders can be daily or "until cancelled" (GTC). Day orders are valid only during the trading session. The essence of “until canceled” orders lies in the name of the order itself.
— Stop orders- A buy stop order becomes a market order when the last traded price of the stock equals or exceeds the order price. A sell stop order becomes a market stop order when the stock's last traded price is equal to or lower than the order price. One way to get quotes throughout the day is to view stock tickers online. The ticker symbol represents a short symbol for the stock.
NYSE Security System
Imagine this situation: one person, let's call him John, has a friend who works as a lawyer at company A. This friend knows that the company is about to acquire a large stake in a food company and tells John about it. John immediately calls his broker and buys a large number of shares of the food company. After some time, the news about Company A's purchase of a large stake in a food company is announced in the press and the price per share immediately rises, and John makes a large profit.
John buys shares based on "insider information"- information that is not available to everyone. Insider trading is illegal, but how can you prevent it? For this purpose, there are special control services designed to identify, investigate and punish illegal actions of trading participants, including insider trading. In particular, the market surveillance service of the New York Stock Exchange is investigating unusual trading situations - cases of trading using insider information, violations of trading rules, reporting rules, etc.
Buying a large number of shares before the share price has risen significantly is immediately recorded by the trading monitoring system. An investigation is being conducted to determine whether the people involved in the transaction are connected to the company whose shares were purchased or to people associated with that company.
Regulatory pyramid
Identifying unscrupulous market participants is one of the tasks of the exchange as a self-regulatory organization. No one regulates itself as tightly and thoroughly as the stock market. Strict standards and requirements for professional trading participants, an extensive system of regulatory services - all these are measures of control over the activities of participants. Protecting and maintaining market integrity is achieved through the joint efforts of four key groups, which together form what is known in the stock market as a regulatory pyramid. It consists of the following organizations:
1. US Congress. Congress nominates members to the Securities and Exchange Commission and is responsible for its effective functioning. He is also responsible for legislative activities in the securities market and for the formation of such new organizations in the stock market as the “Organization for the Protection of Investors in the Stock Market.”
2. Securities and Exchange Commission. A federal agency created by the Securities Market Act of 1934. The law establishes mandatory registration of new issues of shares in a timely manner and in the prescribed form. The Securities and Exchange Commission is the supervisory authority of all the nation's investment firms, brokerage firms, and other securities market organizations. The Commission recommends Congress adoption of new legislative acts aimed at regulating and protecting the stock market. Violators of the rules and standards of the Commission are severely punished - fined, deprived of their license, and also deprived of membership in the exchange.
3. NYSE and other self-regulatory organizations. The New York Stock Exchange is a self-regulatory organization, more than a third of whose employees deal specifically with issues of standardization and regulation of the securities market. The NYSE has developed and published more than 1,000 pages of rules and standards that are followed by all participants trading on the NYSE.
4. Individual brokerage firms. This level of the pyramid consists of more than 400 members of the NYSE. These firms buy and sell shares for clients around the world, ensuring that their employees are highly professional and meet strict standards.
Digest based on electronic media materials
Almost all people (even those who are not familiar with trading) associate the phrase “stock market” with Wall Street and the NYSE (New-York Stock Exchange), the oldest and most famous exchange in the United States. Having a listing on the NYSE has always been a prestigious and expensive pleasure, so shares of the largest and most famous companies (Bank of America, General Electric, Exxon, Ford, Freeport-McMoran, etc.), whose products are known all over the world, are traded on NYSE.
Mergers and acquisitions
The New York Stock Exchange was no exception. Since 2000 A series of mergers and acquisitions began on the NYSE, which led the exchange to the form in which it exists today. Until then, in the United States, in addition to the NYSE, there were (existed) other exchanges - NASDAQ (still exists to this day), CME (exists to this day), AMEX (joined the NYSE), NYMEX (joined the CME), COMEX (joined in NYMEX) and so on.
In 2006, the NYSE absorbed the electronic exchange Archipelago Holdings, which served as the basis for the creation of NYSE Arca Equities (also called the younger sister of the NYSE) and NYSE Arca Options (together with NYSE AMEX Options they form a single platform for trading certain instruments). NYSE Arca Equities trades approximately 8,000 small- and mid-capitalization securities and exchange-traded investment products (ETPs), which include ETFs (exchange-traded investment funds), ETNs (Exchange Traded Notes) and ETVs (Exchange Traded Instruments). Shares of such giants as Adobe, Apple, Cisco, Dell, Hewlett-Packard, IBM and Microsoft are traded on NYSE Arca. Listing rules on NYSE Arca are less demanding, so for many companies, Arca is an opportunity to trade within the NYSE structure and subsequently transfer directly to the NYSE in the most premium segment. Actually, during this period, the NYSE itself becomes a joint stock company and begins trading with a capitalization of $22.5 billion.
In 2007, the NYSE and the pan-European exchange Euronext merged, which included the Paris, Amsterdam, Brussels and Portugal exchanges, as well as the London international exchange financial futures and options (LIFFE). The total capitalization of companies traded on Euronext was $2.9 trillion. According to this indicator, for the specified period of time, the exchange ranked fifth in the world. After this merger, the NYSE becomes known as NYSE Euronext.
Next comes the merger of NYSE Euronext with AMEX - the American Stock Exchange - one of the oldest exchanges in the United States, which in 1972 was almost equal to the NYSE in terms of the number of companies listed on the exchange. AMEX specialized in trading government bonds, but also traded stocks and futures contracts. Before the NYSE, the AMEX exchange had already been purchased by another stock exchange, NASDAQ, in 1998, but AMEX members bought their stake from NASDAQ in 2004. AMEX served as the basis for the creation of two other platforms in 2012: NYSE MKT - for trading shares of small and mid-cap companies, NYSE AMEX Options - for trading options.
But after some time, NYSE Euronext itself was absorbed. This was done in 2013 by ICE (Intercontinental Exchange) for $10.9 billion. ICE was formed in 2000 by Jeffrey Spretcher on the basis of the Continental Power Exchange he purchased (specializing in energy trading) with the support of such well-known banks and companies as Goldman Sachs Morgan Stanley, British Petroleum, Total, Shell, Deutsche Bank and Societe Generale. Before the merger with NYSE Euronext, ICE was actively buying up exchanges around the world - this was necessary to create a business trading in energy contracts. ICE included:
IPE (International Petroleum Exchange), which traded a contract for Brent oil;
. CCX (Chicago Climate Exchange) - Chicago Climate Exchange, which traded quotas for greenhouse gas emissions into the atmosphere;
. NYBOT (New-York Board of Trade) - New York Chamber of Commerce, which traded futures for agricultural products. NYBOT was later allocated to ICE Futures US.
. Winnipeg Commodity Exchange - Canadian exchange specializing in trading in agricultural products, later separated into ICE Futures Canada;
. ChemConnect is a platform on which representatives of about 150 countries traded large quantities of chemical industry products.
After the merger of ICE and NYSE, ICE spins off Euronext (without LIFFE) and conducts its IPO in 2014, during which it sells 60% of its shares.
Actually, through the mergers and acquisitions described above, the current ICE NYSE was created. Moreover, ICE itself is listed directly on the NYSE, which is the most prestigious global platform. There are over 3,000 companies traded on the NYSE with a total capitalization of over $20 trillion, with an average daily turnover of about $60 billion.
Today, the NYSE offers markets such as NYSE MKT, NYSE AMEX Option, NYSE Arca Equities, NYSE Arca Option and NYSE Bonds (which offers bond trading).
Conclusion
The NYSE is a platform on which a huge number of exchange assets are traded, including shares of the world's most famous corporations. These include stocks that are growing faster than indices or show amazing resistance to market declines, which, coupled with the highest liquidity, allows you to build truly diversified portfolios to achieve maximum financial results from your investments.