1 1 (July 02, 2020)

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               Researh Sevice





The Closing of the New York Stock

Exchange's Trading Floor Due to COVID-19



July 2, 2020
The New York Stock Exchange (NYSE) is a major secondary market trading venue for corporate stocks.
On March 18, 2020, the exchange's parent company, the Intercontinental Exchange Incorporated,
announced that after several of the exchange's employees tested positive for Coronavirus Disease 2019
(COVID-19), it was taking the precaution of temporarily closing its iconic and densely packed human
trading floor. In advance of the closure, the Securities and Exchange Commission (SEC), the principal
regulator of domestic stock exchanges, granted its approval.
On May 26, the exchange reopened the floor after the imposition of health-related requirements, including
limiting the number of traders to a fraction of its former size, mandatory masks, a directive to avoid
public transportation, entrance to the exchange conditioned on temperature testing, and social-distancing
facilitated by plexiglass barriers. In addition, floor traders must reportedly sign a liability waiver that
prevents them from suing the NYSE, if they get infected there. This Insight examines the closure, its
impact, and its potential implications for the trading floor's future.

The NYSE and the Trading Floor
Trading several billion shares daily, the NYSE, which dates to the 18h century, ranks second to the
Nasdaq Stock Exchange in trading volume among global stock exchanges. Decades ago, the trading floor
was where all of the exchange's trades were conducted. More recently, the NYSE adopted a hybrid
electronic and human trading model, with electronic trading becoming more and more prevalent.
Immediately prior to the COVID-19 pandemic, about 80% of the trading volume was done electronically.
With the temporary closure, the exchange became 100% electronic.
The exchange conducts initial public offerings and trades the shares of companies that it lists as well as
those that are listed on other exchanges like the Nasdaq. NYSE-listed firms include legacy blue chip
companies such as Coca Cola, Pfizer, Diebold, Procter & Gamble, General Motors, Boeing, Johnson &
Johnson, and IBM. An anomaly among the other entirely electronic modem stock exchanges, the NYSE's
trading floor is manned by floor brokers and designated market makers (DMMs).
DMMs, formerly called specialists, are obligated to maintain fair and orderly markets in their assigned
stocks. Operating both manually and electronically, they facilitate price discovery-the determination of

                                                                Congressional Research Service
                                                                https://crsreports.congress.gov
                                                                                     IN11447

CF'S NStGHT
Prepaimed for Mernbei-s and
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