For 214 years, the New York Stock Exchange operated as a not-for-profit exchange. THE NYSE saw itself as facilitating necessary transactions. While the organization did make a tidy sum from listing fees, which today can run as high as $250,000, it was never a publicly listed company. That meant that until 2006, no outside investors could hold a stake in the NYSE. When the exchange finally went public, there were a few important changes.
Publicly traded companies must fllow certain rules and regulations set forth by the Securities and Exchange Commission. One good example is amount of ownership someone has in a business. If a particular entity holds more than 5% of the company, they represent a threat to takeover the business. Transactions of that nature would need to be immediately reported to the SEC, who could then make an evaluation of the transaction to decide if it’s legal/allowable.
Companies go public for a variety of reasons, but one major one is funding. Once a company lists itself and goes public, it faces competition at a level that was different from its privately owned days. In the case of NYSE, this move was made to make the exchange more competitive.
The NYSE went public as it merged with Euronext. The exchange decided officially to list itself in March of 2006, when it merged with Archipelago Holdings. This merger carried the added benefit of increasing trade activity through computer-driven systems.
About the Author: Pierre Zarokian is an entrepreneur that has started several companies, including Submit Express, iClimber and Reputation Stars. You may contact Pierre on Pierre Zarokian Guru page or Facebook page.