Off-Board Trading of NYSE-Listed Stocks: The Effects of Degregulation and the National Market System

James L Hamilton

Journal of Finance, 1987, vol. 42, issue 5, 1331-45

Abstract: An econometric time-series model of off-board trading of NYSE-listed stocks shows that high NYSE commis sion rates were an incentive for third-market trading, but that tradi ng on the regional exchanges, which is most of off-board trading, has been affected very little by commissions or their deregulation. The effects of some changes in the trading organization and rules are est imated, including several that are part of the emerging National Mark et System (NMS). The estimates imply that the NMS has increased compe tition for the NYSE, as Congress intended, and has prompted the NYSE to improve its performance to retain market share. Copyright 1987 by American Finance Association.

Date: 1987
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