(Bloomberg) -- The New York Stock Exchange said it will allow a limited number of market makers to return to its historic trading floor Wednesday.
A couple dozen designated market makers will be permitted to come back this week, adding to the 25% of participants who returned when the floor partially reopened on May 26. They'll have to sign waivers and submit to medical screenings and random testing for the coronavirus. Inside the venue, they'll be required to practice social distancing, wear face masks and deal with market activity via hand-held devices instead of open outcry.
“This is a really important milestone for us,” NYSE Chief Operating Officer Michael Blaugrund said in an interview. “The expectation is that we'll have the human DMMs to provide the manual opening and closing auctions, which are critical for price discovery and liquidity.”
Designated market maker GTS plans to send eight staffers back to the venue, about half its usual level, Chief Executive Officer Ari Rubenstein said. Buy-side clients have been pushing for the return of DMMs before so-called quadruple witching this Friday, when options and futures on indexes and equities expire; the re-balancing of Russell indexes next week; and the start of corporate earnings season, he said.
“We're about to go into a very, very busy period,” Rubenstein said. Quadruple witching is “a day fraught with a lot of risk because the orders are very large going into the close at the end of the day, and that's typically a time that the human oversight that exists on the floor can shine in sanity-checking some of these orders, having liquidity there ready to go if there's market displacement.”
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