Annie Massa reports Citadel Securities and (MMI Founding Member) Global Trading Systems LLC recently agreed to buy NYSE floor-trading businesses, putting their computers on the same team as humans working at the lower Manhattan facility. They’re joining other automated market makers, Virtu Financial Inc. and IMC, who now oversee nearly all transactions on the floor.
“It gives them legitimacy,” said Rich Repetto, an exchange and brokerage analyst at Sandler O’Neill & Partners LP. “Now they have obligations to the floor and stock issuers. It isn’t purely about them and their proprietary trading.”
“What’s unique about NYSE is it’s the only market that still has humans, and the issuers love that,” said Ari Rubenstein, the chief executive officer of GTS who began his career on a commodities trading floor in New York.
“A big factor in electronic market making is trust,” he added. “The electronic market maker of tomorrow is not only one that has great tech, but can also can be trusted to trade electronically in a way that is going to be beneficial to markets.”