November 16, 2005
The NYSE has settled with dissident members who objected to the price negotiated in the Exchange's merger with Archipelago. Article The parties agreed to hire an independent expert to appraise the value of the deal for Exchange members before the members' scheduled ratification vote. After the announcement of the settlement a seat sold on the Exchange for a record $3.25 million. Seats were trading below $1 million just a few months before the deal was announced.
The run up in the value of exchanges that have gone public should stimulate some soul searching by regulatory authorities. Were the old trading systems, supported by the regulations of federal agencies for so long, deeply undervalued due to regulatory lock-in? Or are the new trading systems overvalued due to new regulatory advantages in Reg. NMS?
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