Stage 7 Expanded Reading
In this stage you are expected to broaden your horizon into the topic of the lecture.Please read the following article carefully.
New York Stock Exchange
Trading approximately 1.46 billion shares each day,the New York Stock Exchange(NYSE)is the largest stock exchange in the world.The Exchange trades stocks for some 2,800 companies worth around $20 trillion dollars,ranging from blue chips to new high-growth companies.The NYSE,nicknamed“The Big Board”,is physically located at 11 Wall Street in New York City.It is open for trading Monday through Friday from 9:30 am – 4:00 pm EST,with the exception of holidays declared by the Exchange in advance.
The history of the New York Stock Exchange begins with the signing of the Buttonwood Agreement by twenty-four New York City stockbrokers and merchants on May 17,1792,outside at 68 Wall Street under a Buttonwood tree.In the beginning there were five securities traded in New York City with the first listed company on the NYSE being the Bank of New York.In 1817 the signers of the agreement drafted a constitution and named their organization the New York Stock & Exchange Board.This name was shortened to the present form New York Stock Exchange or NYSE in 1863.
Trading occurred on the floor as brokers would yell out their orders and trade amongst themselves on behalf of their clients.This form of trading is known as“open outcry”.While open outcry still exists today at the NYSE,the majority of volume is traded through an electronic exchange:Archipelago Exchange.
The Archipelago Exchange was created in 2001 to facilitate electronic stock trading on US stock exchanges.The NYSE announced its plans to merge with Archipelago on April 21,2005,in a deal intended to reorganize the NYSE as a publicly traded company.On December 6,2005,NYSE’s governing board voted to merge with Archipelago and become a for-profit,public company,which began trading under the name NYSE Group on March 8,2006.
On April 4,2007,the NYSE Group completed its merger with Euronext,the European combined stock market,thus forming the NYSE Euronext,which was branded as the“first global stock exchange”.In late 2012,it was announced that the NYSE would be sold to Intercontinental Exchange(ICE),which is a futures exchange,for $8 billion.The ICE acquired Singapore Mercantile Exchange in 2014,expanding its network of futures exchanges in Asia.
While many of the world’s exchanges have gone completely electronic,the New York Stock Exchange maintains a physical trading floor.The major players on the floor of the NYSE are brokers and specialists.Brokers are employed by investment firms and trade either on behalf of their firm’s clients or the firm itself.The broker moves around the floor,bringing“buy and sell”orders to the specialists.
The specialists are independent NYSE members who have been assigned a stock or group of stocks for which they are the designated market maker(DMM).Since a large amount of capital is required in order to fulfill the requirements of a specialist,most specialists are employees of specialist firms.While the specialist is not required to participate in every transaction,every transaction for that security that is executed on the exchange must take place in front of the DMM.The DMM may act as either an agent or as a principal if they play a role in the transaction.
Each specialist stands in one location on the floor and deals in one or several specific stocks,depending on their trading volume.His job is to accept“buy and sell”orders from brokers and manage the actual auction.It is also the specialist’s job to ensure that there is a market for their specified stocks at all times,meaning they will invest their own firm’s capital at times to keep the market active and maintain the shares’ liquidity.
Specialists make money by buying at the price where the public is selling(referred to as the bid price),and selling at the price where the public is buying(referred to as the offer),and pocketing the difference between those two prices(called the bid-ask spread).Within certain guidelines,they are also allowed to take positions in the market,which with their“inside view of the action”can be very profitable.It is for this reason that there are many rules relating to how they can do this,and also why specialists often have a bad reputation for trading against their clients.
Listing requirements on the NYSE are often very specific and stringent.Domestic listing requirements call for minimum distribution of a company’s shares within the United States.For example,one of the listing requirements for public companies is that the company must have at least 1.1 million publicly-traded shares outstanding that are worth at least $100 million.Non-US companies must meet all of the US domestic listing standards.In addition,non-US companies must 1)establish an independent audit committee,2)provide prompt certification by its chief executive officer of any material non-compliance with any corporate governance rules,3)provide periodic written affirmations to the NYSE with respect to its corporate governance practices,and 4)provide a brief description of significant differences between its corporate governance practices and those followed by US companies.
Falling below the minimum required share price or market capitalization is one of the major factors triggering a delisting.For example,if a security’s price is closed below $1.00 for 30 consecutive trading days,the NYSE will initiate the delisting process.
Companies listed on the NYSE are usually abbreviated in one to three letters and occasionally up to four letters.This is known as a“ticker”.For example,the ticker for Citigroup is C,the ticker for Coca Cola is KO,and the ticker for McDonalds is MCD.Investors would type in the company ticker on their brokerage platform to obtain the current price of the stock.The largest companies listed on the NYSE include Exxon Mobil(XOM),Walmart(WMT),Chevron(CVX),ConocoPhillips(COP),Toyota(TM),General Motors(GM),General Electric(GE),Berkshire Hathaway(BRK-A),and Ford(F).
(Source:adapted from articles on www.nyse.com and www.cftech.com)
Task 1:Reading Comprehension Questions
The following questions are asked based on the above article.Please go back to the article and find the answers.
1.Why is the New York Stock Exchange termed the largest stock exchange in the world?
2.When was the NYSE initially established?
3.What did the NYSE do to become a truly international stock exchange?
4.What is meant by“open outcry”?
5.How does the specialist differ from the broker at the NYSE?
6.What does the specialist have to do to function as a market maker?
7.How does the specialist make a profit?
8.What are the primary domestic listing requirements on the NYSE?
9.What are the major requirements for foreign companies to be listed on the NYSE?
10.What may cause a delisting of a company’s stock?
Task 2:Paraphrasing
Explain in English the underlined words and expressions in the context of the above article.
1.The Exchange trades stocks for some 2,800 companies worth around $20 trillion dollars,ranging from blue chips to new high-growth companies.
2.The signers of the agreement drafted a constitution and named their organization the New York Stock & Exchange Board.
3.The DMM may act as either an agent or as a principal if they play a role in the transaction.
4.It is also the specialist’s job to keep the market active and maintain the shares’ liquidity.
5.Within certain guidelines,they are also allowed to take positions in the market,which with their“inside view of the action”can be very profitable.
6.It is for this reason why specialists often have a bad reputation for trading against their clients.
7.Listing requirements on the NYSE are often very specific and stringent.
8.Non-US companies must provide prompt certification by its chief executive officer of any material non-compliance with any corporate governance rules.
9.Falling below the minimum required share price or market capitalization is one of the major factors triggering a delisting.
10.Investors would type in the company ticker on their brokerage platform to obtain the current price of the stock.
Task 3:Translation
Read the article again and translate it into Chinese.
阅读文章参考译文：
纽约证券交易所
纽约证券交易所是世界上最大的股票交易所，日均交易量约达14.6亿股，挂牌上市的公司约有2 800家，其中既有蓝筹股也有成长股，总市值高达约20万亿美元。纽交所被戏称为“大板交易所”，坐落在纽约市华尔街11号。营业时间为美国东部时间周一至周五的上午9：30到下午4：00，除交易所事先公布的节假日外。
纽约证券交易所起源于“梧桐树协定”。1792年5月17日，纽约市的二十四名股票经纪商和贸易商，在华尔街68号外的一棵梧桐树下签订了这份协定。最早在纽约市交易的股票只有五支，第一家在纽交所上市的企业是纽约银行。1817年，协定的签署各方又起草了一项章程，将他们的机构命名为纽约证券与交易委员会，直到1863年才简称为现在的纽约证券交易所或纽交所。
交易大厅的经纪商代客喊出他们的买卖价格，这种交易方式被称为“公开喊价”。虽然纽交所仍然采用公开喊价的方式，但大部分的交易还是通过全电子证券交易所，即群岛电子交易所来完成的。
群岛电子交易所创建于2001年，目的是方便美国的股票进行电子交易。2005年4月21日，纽交所宣布了与群岛电子交易所的合并计划，旨在重组纽交所成为上市公司。2005年12月6日，纽交所的董事会通过表决，同意兼并群岛电子交易所，之后成立一家营利性的股份有限公司。2006年3月8日，纽交所集团挂牌上市。
2007年4月4日，纽交所集团完成了与泛欧证券交易所的合并，成立了纽约泛欧证券交易所，被誉为“第一个全球证券交易所”。2012年年末，纽交所曾宣布将以80亿美元，出售给一家名叫洲际交易所的期货交易所。这家洲际交易所在2014年收购了新加坡商品交易所，扩张了它在亚洲期货交易市场的网络。
尽管世界上许多交易所已经完全电子化，但是，纽约证券交易所依然保留场内交易。纽交所场内交易的参与主体是券商和专家经纪商。券商受雇于投资公司，为投资公司进行自营交易或代客交易。券商在交易大厅里走动，将“买单”和“卖单”递交给专家经纪商。
专家经纪商是独立的纽交所会员，他们负责一支或一组股票，并是这些股票的指定做市商。由于做市商需要有大量的资金去满足做市要求，因此，大多数做市商隶属于专家经纪商公司。虽然做市商不需要参与每一笔交易，但是，在交易所成交的每一笔交易都必须经过做市商过目。如果做市商参与交易，那么，他们要么是代客交易，要么是自营交易。
专家经纪商在场内都有自己的坐席，根据流通盘的大小，负责单支或多支指定的股票。其职责是接受券商的“买单”和“卖单”，然后进行实际的竞价交易。同时，专家经纪商还要确保自己负责的股票有市场，这就意味着他们有时会动用公司的资金，以保持市场的活跃和股票的流动性。
专家经纪商按公开的卖出价格（即买价）买入，按公开的买入价格（即卖价）卖出，从中赚取差价（即买卖价差）。在特定的情况下，他们也可以进场坐庄，根据行情的“内部信息”，获取的利润是相当可观的。因此，有很多规定会限制他们坐庄，这也就是为什么专家经纪商经常背负恶名，说他们违背客户利益自营获利的原因。
纽交所的上市标准通常是既明确又严格。美国本土公司上市，要符合公司的股票在美国境内达到最低发行量的规定。比如说，上市的其中一个标准是，上市公司必须至少公开发行不少于110万股，价值不低少于1亿美元。非美国公司除了必须达到所有的美国国内上市标准之外，还要遵守以下规定：1）成立独立的审计委员会，2）及时提供首席执行官在公司治理上没有任何违法行为的证明，3）定期向纽交所提供公司治理实践的书面申明，4）提供本公司与美国公司在公司治理上存在明显差异的简述报告。
导致摘牌的重要因素之一是，股价或市值跌破了最低标准。例如，如果一只股票的股价连续30个交易日报收低于1美元，那么，纽交所就会启动摘牌程序。
在纽交所上市的公司通常都由一至三个最多四个缩写字母来表示，称为“行情显示代码”。例如，花旗的显示代码是“C”，可口可乐的是“KO”，麦当劳的是“MCD”。投资者只要在券商的交易平台上输入行情显示代码，就可以获得股票的现行价格。在纽交所挂牌的大公司包括埃克森美孚公司（代码XOM）、沃尔玛（代码WMT）、雪佛龙公司（代码CVX）、康菲石油公司（代码COP）、丰田汽车（代码TM）、通用汽车（代码GM）、通用电气（代码GE）、伯克希尔哈撒韦公司（代码BRK−A）和福特汽车（代码F）。