Global Stock Trading

Editorial NYTimes.com Homepage Published: June 2, 2006

It has been over two centuries since securities traders began meeting informally under a buttonwood tree on Wall Street. The New York Stock Exchange's columned neo-Classical building is as instantly recognizable as the ceremonial ringing of the opening and closing bells, its floor brokers the embodiment of the frenzied pace of the market. The exchange remains a potent symbol of this city's and this country's financial pre-eminence. Despite the tradition, things have changed. Investment is no longer contained by national boundaries, and operations are regularly executed electronically. Into the crowded fray come new and more complicated financial instruments.

If the exchange's corporate parent, the NYSE Group, is going to keep up, it will have to embrace change. Last year the company announced its acquisition of the electronic trading network Archipelago. Now it has reached a deal for the cross-border European exchange company Euronext. If approved by regulators and shareholders, it would be the first trans-Atlantic market, though the rival Nasdaq has already bought up a 25 percent stake in the London Stock Exchange. Rather than leading the way, the exchanges are catching up to the reality of internationalized investing.

The combination would create "the world's most liquid and truly global financial marketplace," according to John Thain, chief executive of the NYSE Group. It would certainly be a goliath, with a combined market capitalization at the time of the offer of roughly $21 billion and listed companies worth a total of $27 trillion. Most important to investors in the exchange companies themselves is the $375 million in potential savings that NYSE Group predicts for a combined entity. If a combined company can pass the fruits of those savings on to the average investor — not to mention added ease in buying shares of foreign companies — we're all for it.

An era of global trading could benefit from international exchanges. Regulators on both sides of the Atlantic should take a cue and speed up the process of bringing their respective rules into harmony. There's no time to lose. The financial markets never sleep.