NYSE Explores Contingency Plan To Close Trading Floor As COVID-19 Looms

As COVID-19 shutters schools and community centers across New York, the New York Stock Exchange is considering closing its trading floor and shifting all trading to backup electronic systems.

NYSE Considers Emergency Procedures

Intercontinental Exchange Inc ICE 12.35%, which owns the NYSE, adopted early precautions to preempt the spread of the coronavirus. It called off tours, blocked visitors and cancelled the traditional executive bell-ringing, according to The Wall Street Journal.
Now, it is considering activating emergency procedures that enable trading firms to conduct closing auctions through remote connection to NYSE’s systems. The plan also includes a suspension of initial public offerings.
Should it suspend in-person activity, the NYSE will be following the lead of CME Group.
On Friday, CME will indefinitely close its Chicago trading floor and shift all trading to its electronic platform, according to a Wednesday announcement.
‘A Risk That Is Material In Nature’ For Stocks 
The NYSE has never executed its contingency plan under similar conditions. It has tested the procedure only over inactive weekends, the Journal said.
Some fear that floor closures could further disrupt already-volatile markets.
The NYSE floor coordinates session-closing auctions to determine day-end prices for NYSE-listed securities. The process affects thousands of stocks, as well as millions of investors that use closing prices as benchmarks for index funds and ETFs.
“The closing auction is arguably the most important moment of the trading day,” Greg Tusar, former global head of electronic trading at Goldman Sachs, told the  Journal. “Anything that happens to it that hasn’t been tested is a risk that is material in nature.”

NYSE Says It’s Working To Keep Trading Floor Open

The NYSE is in a unique position as the only U.S. stock exchange operator with a physical trading floor. Nasdaq and Cboe run on all-electronic trading systems. Intercontinental Exchange intends to preserve its uniqueness if possible.
“The NYSE is a unique meeting place for buying and selling securities,” an NYSE representative said in a statement.
“While we constantly test our resilient systems that allow us to operate that meeting place in a fully electronic fashion — which we did, successfully, as recently as last weekend — we are also taking the necessary measures to help ensure that our iconic trading floor remains open for business during this volatile period.”
https://www.benzinga.com/news/20/03/15536523/nyse-explores-contingency-plan-to-close-trading-floor-as-covid-19-looms