By Alexander Osipovich
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 26, 2020).
The New York Stock Exchange is set to reopen its famed trading
floor Tuesday, but it won't be going back to normal.
Only one-quarter of the NYSE's usual population of traders will
be back when the floor resumes business after a two-month closure
prompted by the coronavirus pandemic. Traders who return must wear
masks, avoid taking public transportation and follow tough
social-distancing rules, with newly erected Plexiglas barriers to
help them stay apart.
A visitor ban means splashy bell-ringings and celebrations to
mark initial public offerings won't be happening anytime soon.
Media organizations that broadcast from the floor, like CNBC and
Cheddar, aren't coming back yet either.
To return to their jobs, floor traders must sign a liability
waiver that prevents them from suing the NYSE if they get infected
at the exchange. They must acknowledge that returning to the floor
could result in them "contracting Covid-19, respiratory failure,
death, and transmitting Covid-19 to family or household members and
others who may also suffer these effects," according to the waiver,
a copy of which was seen by The Wall Street Journal.
The waiver has fueled tensions between the NYSE, owned by
Intercontinental Exchange Inc., and some Wall Street firms with
representatives on the floor.
Floor traders aren't exchange employees, but instead work for
various banks, brokerages and trading firms. The NYSE has asked
such firms to sign an agreement under which they would compensate
the exchange for certain lawsuits arising from a Covid-19 outbreak,
people familiar with the matter said. Some firms have balked at the
agreement, including Morgan Stanley, which isn't planning to send
its brokers back to the floor, the people said. A NYSE spokeswoman
declined to comment on the dispute.
Still, many traders are expected to sign the waivers and go
back, particularly floor brokers who work for smaller firms and
have been strapped for cash during the closure.
Many floor brokerages -- which execute trades at the NYSE on
behalf of clients like banks and asset managers -- have fewer than
20 employees, and their revenue dried up during the closure. Some
got loans under the Paycheck Protection Program to cover lost
income.
"I feel confident that the health and safety of the floor
community is the NYSE's No. 1 priority," said Jonathan Corpina,
senior managing partner at Meridian Equity Partners, a floor
brokerage. "I have no doubts about going back to the floor."
Meridian plans to have six brokers, including Mr. Corpina, back
on the floor this week. Before the closure, the firm had 15 brokers
on the floor on a typical day. But now, most of Meridian's seats
must stay empty to let brokers maintain a safe distance from one
another.
The NYSE has one of the world's last stock-exchange trading
floors, though its population has been decimated over the past 20
years as markets have gone electronic. NYSE officials say the floor
remains useful because traders there can apply "human judgment" to
transactions, especially large, complex ones like IPOs and the 4
p.m. auctions that determine end-of-day stock prices.
The floor is also an important part of the NYSE's brand, helping
the exchange win listings from companies whose executives ring the
opening bell and hold events at its historic building in lower
Manhattan.
As the coronavirus pandemic gained force in March, the NYSE
initially resisted closing its floor, while other U.S. exchanges
closed theirs to curtail the spread of the virus. NYSE officials
reversed course after a floor trader and an exchange employee
tested positive for Covid-19.
Now, the NYSE is moving cautiously to limit the risk of a new
outbreak. It devised its reopening plan with assistance from
outside advisers including Scott Gottlieb, a former commissioner of
the Food and Drug Administration under President Trump.
Floor traders must submit to temperature checks on entering the
building, with blue markings on the sidewalk to ensure they stand 6
feet apart while waiting in line. Inside, they must avoid shaking
hands or other physical contact. Eating on the floor is banned, to
ensure masks stay on at all times, though traders can still have
lunch at designated spots in the NYSE's cafeteria.
The floor will also be a quieter place with the designated
market makers continuing to work remotely. Normally, such traders
stand at posts in the middle of the floor and oversee trading in
NYSE-listed stocks, and floor brokers can come up to them and shout
out orders to buy or sell stocks. With the DMMs absent, that
practice will be halted.
The NYSE will deep-clean its building daily after markets close,
and a team of workers will clean frequently touched surfaces like
door handles throughout the day. But even such precautions may not
be enough to stop the virus, NYSE President Stacey Cunningham
warned in a May 14 opinion piece in the Journal.
"For the NYSE and the nation as a whole, it's important to
approach reopening with realistic expectations," she wrote. "While
our plan is designed to reduce risk, it cannot eliminate it."
--Corrie Driebusch contributed to this article.
Write to Alexander Osipovich at
alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
May 26, 2020 02:47 ET (06:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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