NEW YORK–(BUSINESS WIRE)–The New York Stock Exchange (NYSE), a subsidiary of Intercontinental
Exchange’s (NYSE:ICE) global network of exchanges, today outlined
actions it will prioritize to enhance U.S. equity market structure and
strengthen the markets during times of extreme volatility.

The NYSE continually seeks opportunities to improve market structure,
and following global market volatility during the second half of 2015,
evaluated ways to adapt its rules and process across its exchanges. The
NYSE subsequently made a number of changes including:

• Increased the transparency of pre-opening indications, effective
  October 26, 2015;
• Widened collars on NYSE Arca’s opening auction, effective September 8,
  2015;
• Announced the elimination of stop orders from February 26, 2016.

NYSE undertook research and analysis to identify opportunities to
further enhance market structures and trading rules. Additionally, NYSE
retained McKinsey Company, a leading global management consulting
firm, to conduct interviews with a number of market participants,
including market makers, liquidity providers, broker-dealers and
issuers, to gather feedback on potential market structure changes.
NYSE’s review and analysis of the research are included in the detailed
report outlining a series of changes to better protect long-term
investors during periods of extreme market volatility. The report also
includes a review of trading events on August 24, 2015. The full report
can be found at https://www.nyse.com/publicdocs/Strengthening_US_equity_market_structure.pdf.

“We take seriously our leadership role in the U.S. market structure
discussion, and are pleased to have advanced from dialogue to what are
now meaningful steps that we will begin taking to improve markets for
all investors,” said Tom Farley, NYSE Group President. “With a vast
offering of products for investors and as the global leader in exchange
traded products (ETPs), with over 93 percent of U.S. assets under
management listed on our markets, we are committed to ensuring that the
U.S. remains the leading capital market in the world.”

The report identifies five actions based on feedback from market
participants that NYSE believes should be taken immediately to
materially improve the stability of the cash equity and ETP markets:

• Amending the Limit Up/Limit Down program (LULD) procedures to:
  • Harmonize LULD re-opening auction behaviors across U.S. exchanges;
  • Facilitate price recovery for securities that fall or rise under
    double-wide bands during the market open;
  • Consolidate orders on the primary market during re-openings after
    halts; and
  • Extend the duration of trading halts to clear order imbalances
    prior to reopening.
• Eliminating conditions that may preclude price bands from being in
  immediate effect after a halt;
• Synchronizing Clearly Erroneous Execution (“CEE”) rules and LULD bands
  across venues;
• Enacting guardrails and industry best practices around the use of
  market orders and stop orders (which turn into market orders once
  triggered); and
• Increasing coordination on education efforts to ensure investors
  better understand market structure features and enhancements.

“Products, technology and markets continue to rapidly change, and we are
committed to implementing enhancements to market structure that
strengthen market stability and soundness,” said Stacey Cunningham, NYSE
Group Chief Operating Officer. “This report identifies a number of
priorities for enhancing market structure that have the support of a
broad cross-section of our industry and which can and should be
implemented quickly. Taking these steps will not only offer operational
and trading improvements, but also, and importantly, support investor
confidence that our markets are the fairest, most efficient capital
markets in the world.”

The report also outlines a series of potential solutions that NYSE
believes warrant further evaluation as to their potential to augment
price transparency, incentivize greater liquidity and improve overall
efficiency of the capital markets.

Cunningham also said that NYSE would continue reviewing a number of
additional industry-wide and exchange-specific solutions that could
address instances of extreme market-wide volatility.

“Extreme volatility events are rare, and analysis of those events don’t
represent the norm, but do offer an opportunity to evaluate the
effectiveness of current market structure in times of stress and
consider improvements,” Cunningham said. “We believe that, after the
volatility of August 2015, market participants are better informed about
the interaction of specific rules and triggers embedded in the national
market system. In addition, many liquidity providers have changed their
trading practices to be more responsive and automated to better manage
the effects and impact of major market volatility.”

Cunningham added that NYSE is committed to creating a more robust and
transparent trading environment.

“We will continue to pursue many of the solutions identified in this
report and identify additional enhancements as needed, while working
with the industry to build insight and support,” she said. “We remain
committed to ensuring continued efficiency in daily trading at the NYSE.”

About NYSE Group

NYSE Group is a wholly-owned subsidiary of Intercontinental Exchange
(NYSE:ICE), operator of the leading global network of exchanges and
clearing houses. NYSE Group operates multi-asset exchanges and a range
of related data products and technology services. The company’s equity
exchanges — the New York Stock Exchange, NYSE MKT and NYSE Arca —
trade more U.S. equity volume than any other exchange group. NYSE is the
global leader in capital raising for listed companies, including the
majority of technology IPOs globally since 2012. The company’s equity
options markets, NYSE Arca Options and NYSE Amex Options, offer
complementary market models.

About Intercontinental Exchange

Intercontinental Exchange (NYSE:ICE) operates the leading network of
exchanges and clearing houses, serving global commodity and financial
futures, and equity markets. The New York Stock Exchange is the world
leader in capital raising and equities trading. ICE is also a leading
provider of data services across global markets.

Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange,
Interactive Data and Trayport. Information regarding additional
trademarks and intellectual property rights of Intercontinental
Exchange, Inc. and/or its affiliates is located at www.intercontinentalexchange.com/terms-of-use

Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995 – Statements in this press release regarding ICE’s business that
are not historical facts are “forward-looking statements” that involve
risks and uncertainties. For a discussion of additional risks and
uncertainties, which could cause actual results to differ from those
contained in the forward-looking statements, see ICE’s Securities and
Exchange Commission (SEC) filings, including, but not limited to, the
risk factors in ICE’s Annual Report on Form 10-K for the year ended
December 31, 2014, as filed with the SEC on February 5, 2015.

SOURCE: Intercontinental Exchange

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