What does the sale of the New York Stock Exchange (NYSE) mean?

Well, it's really not good news. Here's Friday's Wall Street Journal editorial -

How is it that a derivatives trading platform younger than Justin Bieber is about to acquire the New York Stock Exchange, NYX -0.68% which traces its Wall Street lineage to 1792? Thursday's announcement that IntercontinentalExchange (ICE) ICE -2.66% will buy NYSE Euronext for about $8 billion is in part the story of a tech-savvy upstart that quickly grew to eclipse established giants.

But this is not exactly a classic capitalist tale of open markets and creative destruction. There's also been some regulatory destruction here, and it's looking less creative lately.

A mere 12 years after its founding, ICE now has a greater market capitalization than the venerable NYSE. This is partly because ICE has been a leader in moving financial instruments on to electronic trading platforms and away from old-fashioned pits filled with people shouting at each other. But it's also because the London energy futures markets where ICE makes a lot of its money have been allowed to grow, while U.S. law and regulation have imposed a heavy burden on the U.S. equity market, the NYSE's traditional core.

Hit the link for the whole story.

 

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