Big Board Chief Wants To Lengthen Exchange's Hours in Global Market

The coffee carts might be opening two hours earlier on the corner of Wall and Broad Streets if New York Stock Exchange chief executive officer John Thain has his way. Mr. Thain, speaking to reporters yesterday after a session at the World Economic Forum at Davos, Switzerland, said the Big Board is pondering a 7:30 a.m. opening to stem market-share erosion from Internet-based competitors and grab additional business from European institutional investors. There was no timeframe placed on the potential move. For the past 19 years, the Exchange has opened at 9:30 a.m.

A spokesman for the NYSE, Christiaan Brakman, said the extension of trading hours is just one of the options being looked at by the Exchange.

Mr. Thain's proposition is no slam-dunk, since other Big Board CEOs have tried to extend the hours in the recent past, to no avail. In 1991, chairman William Donaldson - now running the Securities and Exchange Commission - suggested a 9 a.m. opening. It was scuttled after West Coast dealers complained about starting trading at 6 a.m. In 1999, Chairman Richard Grasso gave an interview in which he said he envisioned the NYSE trading from 5 a.m. until midnight. After Mr. Grasso resigned in 2003 - he was indicted by New York State Attorney General Eliot Spitzer last year for misleading the NYSE board to obtain a pay package valued at $140 million - the idea was not brought up again. This time, however, the NYSE's more precarious competitive position lends Mr. Thain's suggestion more weight. 2.3% of all Big Board-listed stocks are now being traded by its emerging rival, Chicago-based Archipelago Exchange, a fully automated electronic buy- and sell-order matching system. Moreover, for the first time in seven months, the NYSE's share of trades in its listed stocks dropped below 80%.

A San Francisco-based managing director on an NYSE member firm equity-trading desk said he and his colleagues were unanimous in their opposition to the idea. "It will make our life unbearable, and it will not bring them - or us - more money, which is why they are doing it," he said. Speaking on condition of anonymity, given his firm's restriction on commenting to the press, he said that he and his colleagues would have to arrive at their desks around 4:30 a.m. each morning. "The NYSE is doing this to raise revenues," said the trader. "But if the problem is declining trading volumes, then all they will be doing is stretching thin volumes over an additional two hours.

"If we had seen a demand from customers for earlier trading, then we would have had earlier trading in 1991. We are not seeing that demand."

In 2003, the last year for which figures are available, the NYSE earned $157.2 million in trading fees paid by member firms, a 3% increase over 2002.Total revenues in 2003 were $1.07 billion, a sub-1% increase over 2002.