NYSE float ends 200-year era

More than two centuries ago, 24 brokers signed an agreement laying the groundwork for the New York Stock Exchange. Yesterday the exchange's 1366 members rebuilt that foundation.

They voted in favour of the NYSE's proposed purchase of Archipelago Holdings Inc, an electronic market based in Chicago, transforming the world's largest stockmarket into NYSE Group Inc, a publicly traded company.

Each member will receive $US5.11 million ($6.8 million) in NYSE Group stock and cash. The payment will end a form of ownership that dates back to the Buttonwood Agreement, a 1792 accord named for the tree on Wall Street where stock trading took place.

"It's a tug at the heartstrings," said Bob Shaw, an NYSE member since 1960, from his home in Stuart, Florida. "There is no question that there is a certain amount of nostalgia to it, but it's the dollars and cents that make the difference."

The merger will ultimately enable the exchange to expand its ability to handle trades electronically, staving off challenges from its longtime rival Nasdaq and global competitors like the Deutsche Borse.

Emotions ran high as the polls finally closed and the initial tally was drawn.

The exchange said that more than 90 percent of its members voted. Earlier yesterday, shareholders of Archipelago, based in Chicago, had approved the deal.

"This is a truly historic day for the New York Stock Exchange and an event of great importance for our future and that of our customers and America's capital markets," the chief executive of the exchange, John Thain, said in a statement. "Our members have embraced an initiative that enables the NYSE to maintain our leadership position and to advance our goal of becoming a global multiproduct marketplace."

The exchange was able to proceed with the vote after reaching a settlement last month with 10 dissident members who sued to halt the merger.

The dissidents, led by a longtime member William Higgins, had argued that the deal was flawed because Goldman Sachs advised both the exchange and Archipelago Holdings. The settlement called for an outside evaluation of the deal. Late last month, Citigroup, which did the evaluation, deemed the deal to be fair to all parties.

The first NYSE constitution was adopted in 1817, according to the exchange's website. In 1971, the Big Board incorporated as a not-for-profit company owned by the members.

The switch to public ownership follows similar shifts in Europe and Asia, starting with Deutsche Borse. The shares of Nasdaq Stock Market Inc, the NYSE's biggest US competitor, have traded since July 2002.

NYSE Group will become the world's second-biggest publicly traded stock exchange by market value at $US9.44billion, based on Archipelago's close of $US59.95 a share. Deutsche Borse is the largest at $US10.9billion. The Big Board is No.1 by the total market values of companies listed.

Memberships will be replaced with 1000 to 1366 annual trading licences. The exact number and price of them will be determined through an auction every December.