The
fact, that trigger for the departure
of Richard Grasso was pulled by institutional
investors, has not received much attention.
CalPERS, Calstrs and the New York
State Pension Fund, which joined the
criticism, are the three largest public
pension funds in the US, and, with
a combined portfolio of $340 billion,
are among the NYSE's largest customers.
They have as much right to speak out
on public issues, as investment bankers
have to keep quiet about them. It
is refreshing to see institutional
investors finally starting to do so
after years of being content with
the blandishments of buy-side banks
and brokerage firms.
One
comment in particular - that CalPERS
and Calstrs would take their business
elsewhere if they didn't get what
they wanted at the NYSE - sounded
like bluff. You don't have to trade
NYSE-listed stocks on the trading
floor, but abandoning the world's
biggest stock market is easier said
than done, and liquidity is a key
component in any transaction.
CalPERS are now starting to push for
investor representation on the NYSE’s
board. Sean Harrigan, President of
the board of administration of CalPERS,
says 50 % of the board members should
be investors.
Jerry
Putnam, Chairman and Chief Executive
of Archipelago, a national securities
exchange and rival to the NYSE, says:
"For at least 25 years the best
interests of the investors have not
been protected by the NYSE system.
