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NYSE Dims the Lights to Attract Trading

Traders work on the floor of the New York Stock Exchange.
Traders work on the floor of the New York Stock Exchange.Photograph by Spencer Platt/Getty Images

For the past decade, the New York Stock Exchange has watched its share of trading volume slowly erode. While a lot of that volume simply vanished as individual investors pulled an estimated $300 billion out of U.S. equity mutual funds since 2009, plenty of it was grabbed by upstart competitors: Public exchanges Direct Edge and BATS, launched in 2005 and 2006, respectively, now account for a combined 17 percent of all equity trading volume in the U.S. Today the NYSE handles about 22 percent, down from around 80 percent in the late 1990s.

What’s really vexed the NYSE is all the trading that’s been lured off public exchanges, and either executed internally within wholesale brokerages or on private trading venues known as dark pools. Today about 30 percent of all equity trading in the U.S. goes off “in the dark,” where it is not subject to the same rules, regulations, and disclosure policies that govern public exchanges.