THE NYSE TACKLES THE FUTURE.

• Author: Heffes, Ellen M.
• Position: New York Stock Exchange - Company Profile - Statistical Data Included

The NYSE, an icon for listing and trading shares of the world's most prestigious corporations, takes on today's corporate and competitive challenges from the global, technological, economic and customer arenas.

When it began in 1792, the New York Stock Exchange was virtually "the only guy on the block." In the more than two centuries since its inception, it's become an icon for listing and trading shares of a majority of the world's most prestigious corporations, representing a global market capitalization exceeding $17 trillion. It now lists 2,814 companies, and trades on average, $45 billion daily - with ambitious plans during the next several years to expand the trading capacity from five to 10 times today daily average of 1.2 billion shares.

Now, however, it's not the only guy on the block. And, as a business - like the companies it lists - the NYSE is facing today's business challenges. How it responds to the dynamics of the new competitive forces and market evolution - from the global, technological, economic and customer arenas - will impact its ability to maintain its cachet among those companies aspiring to list on the NYSE.

"While the basic business model has stayed the same, much about the environment and the way things are done - both inside and out - have changed dramatically," says Catherine R. Kinney, since 1995, group executive vice president and a member of the Office of the Chief Executive, one of four executives reporting directly to Chairman and Chief Executive Officer Dick Grasso.

In her current role, Kinney is responsible for competitive positioning and external relationships with the NYSE's many constituents. Since joining the Exchange in 1974, she's held positions in regulation, sales and marketing, technology planning and managing the trading-floor operations and technology.

This varied career has given her a good perspective on the NYSE's multifaceted mission. Kinney outlines the four basic roles: First, helping in the capital-raising process for companies initially going to the public markets. Second, running a very active and liquid secondary market, so that companies in the public space, or those that qualify for listing, benefit from the centralized agency auction market. Third is a regulatory role, making sure that trading is fair to all investors and that members representing investors abide by the Exchange's rules and constitution. In a fourth role, the NYSE serves as a public policy forum where interested parties discuss and debate industry issues.

So, while it's not that competition or change is new to the NYSE - it's been dealing with competitive challenges for quite some time, from exchanges regionally and abroad and (since the 1970s) from the Nasdaq market - what has changed is the nature and dynamics of the competition and the NYSE's response and competitive positioning. For example, new competition is coming from electronic communications networks (ECNs), such as Instinet and Island, though these are not now major rivals.

"There are fundamental changes occurring -- whether that's more and greater use of technology, the introduction of new products, or...