New reserve display requirements take effect tomorrow, 4 October

http://exchanges.nyse.com/archives/2007/10/reserve_display.php

Beginning on October 4, 2007, the NYSE is reducing the minimum displayed size requirement that Floor brokers and specialists must meet to 100 shares1 in order to have non-displayed interest at the NYSE quotation.

The NYSE is retaining the ability for Floor broker and specialist reserve interest to automatically replenish the displayed amount of interest at the NYSE BBO when trades reduce or exhaust such displayed interest. As before,, the displayed quantity will be replenished based on the initial instructions from the Floor broker or specialist.

Example:
Assume a Floor broker or specialist had originally placed 2,000 shares in reserve and had given instructions to maintain 500 shares as a displayed amount in the quote. If an execution takes place which reduces the displayed amount to 200 shares, 300 shares would be shifted from the reserve to replenish the displayed amount.

The NYSE also is retaining the way in which the residual reserve amounts are handled: if the remaining reserve quantity is less than the amount to be displayed then the remainder of the reserve interest will be displayed in full.

Example:
Using the facts of the aforementioned example, if only 200 shares of the original reserve interest remains then the displayed quantity will be the final 200 shares, bringing the total displayed amount to 400 shares.

When entering reserve interest, brokers should be mindful of their best execution obligation to their customers, and should ensure that their choices as to the size of the displayed amount (and the replenishment amount) are consistent with that obligation.

The idea behind this is that brokers will be better able to represent the interests of their customers without tipping their customers' intentions to the world, thus getting a better price and fill. Specialists will be able to add depth more freely without exposing their positions to competitors. The desired end result is that customers will be able to access a deeper pool of liquidity and thus get better trade executions.

Sorry to post this so late in the day, but my today was pretty much like this: meetingmeetingmeetingmeetingsandwichmeetingmeeting...you get the idea. I'm now on my train, where the connectivity is sometimes a little dodgey but the only meeting to be had is meeting the guy sitting next to me who just got on at Secaucus and smells like a Schlitz. But he's reading the Post sports-page-first, so he can't be all bad.