The Financial Times recently reported that the New York Stock Exchange is turning an old vault into an invite-only social club. The launch resurrects a famous perk that existed from 1898 until 2006. Ironically, electronic trading contributed to the demise of the old club, while the vault being used for the new club was previously used to store stock certificates – electronic trading giveth, and electronic trading taketh away. This MSN article speculates on some of the motivations:

There is an interpretation in Wall Street that this strategy was devised to counter Nasdaq, which has been challenging the NYSE’s dominance. . . . The FT stated, “Although the NYSE claims the creation of the social club is unrelated to large IPOs, it involves a pride competition with Nasdaq and listing fees in the hundreds of thousands of dollars annually.” Nasdaq also has its headquarters in Manhattan, New York, alongside the NYSE. However, it operates electronically and does not have a separate trading floor where traders are stationed or events like opening bells are held, unlike the NYSE.

Additionally, the plan includes creating a networking hub within the building for industry giants to counter the Texas Stock Exchange, which is set to open this year and positions itself as a ‘rival to Wall Street.’ The Texas Stock Exchange, in which global financial giants like Goldman Sachs and JPMorgan are investors, has emerged as a rising power threatening the New York exchanges.

The FT article says that the NYSE Group president will have the final say on who makes the cut for this exclusive venue. If anyone reading this is on that list, more power to you (literally)! This sounds like the type of place where I would be anxious about using the wrong fork.

– Liz Dunshee