Too Early To Call Recovery, NYSE Euronext CEO Says
September 24 2009 - 3:28PM
Dow Jones News
Duncan Niederauer, chief executive of the NYSE Euronext (NYX),
said he sees reason to be optimistic about the economy, but
believes it's far too early to tell if the market's rebound
indicates an economic recovery.
Niederauer said he hasn't seen enough from the government to
directly stimulate investments. He made his comments here Thursday
at the Investment Company Institute's 11th annual capital markets
conference.
"We need to make sure that the money is available, and right now
the credit market is not really open," he said. If you are a
smaller company looking for affordable private capital, "forget
it," he said.
He also called for simpler, more harmonized market regulation,
and a more level playing field between regulated exchanges and
alternatives, such a dark pools.
With U.N. meetings now taking place in the city, Niederauer said
he's met with many heads of state this week.
"When I say that it's really difficult for small companies with
pristine credit ratings to get affordable private capital," they
say it's the same in their countries, he said.
While a lot of the solutions proposed by the Obama
administration are "directionally correct," it hasn't taken action
on many reforms yet, Niederauer said. One area of concern, he said,
is the gap that exists between the Securities and Exchange
Commission and the Commodity Futures Trading Commission.
It's important to recognize that a lot of those in Washington,
D.C., are not aware that about 40% of the market is opaque and
largely unregulated. "They don't understand it," he said.
As for unregulated exchanges, Niederauer said he's not calling
for the end to dark pools, though he does wish the barriers to
entry were higher. He noted, however, that "we are burdened with a
lot of stuff that those entities are not."
While a dark pool can simply move ahead with an idea, "we have
to write a rule, file with the SEC, go through drafting, drafting,
drafting," to move forward, he said. "They go fast, and we are
forced to go really slow."
He called on regulators to level the playing field between the
regulated exchanges and these unregulated venues.
"If you are going to allow these pools to exist, why would
anyone want to be a regulated exchange?" he asked. "There are only
burdens (to being a regulated exchange) in this country, and it's
becoming increasing the case in Europe."
In addition, Niederauer indicated that there's room for
manipulation of exchanges as they exist now. "If our responsibility
collectively is to police the broader equity market, somebody needs
100% of the information," he said. "Right now, we don't have
it."
Those venues that say they can't be manipulated don't know
enough to be sure, he said. Those who wish to manipulate will not
execute all legs of their plan in one venue, he said.
-By Daisy Maxey, Dow Jones Newswires; 212-416-2237;
daisy.maxey@dowjones.com