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Board of Directors
Board of Executives
The New York Stock Exchange, Inc.
11 Wall Street New York, NY


Dear Ladies and Gentlemen:


Historically, individual Members of the New York Stock Exchange (“NYSE”) have not been a concern of the NYSE’s management. Traditionally, the focus has been on trading entities, listed companies and regulators. Individual owners of the NYSE were simply not a factor, as they were thought of as benign retirees or beneficiaries of estates who merely rented out their floor access privileges to traders. Trading Members were generally compliant in their ownership role, given the potential impact of management on their daily lives.In the rather static world which existed in the pre Grasso/Specialist problem era, owners were relatively content to trust management to act in their best interests as well as the interests of all of the constituencies involved at the NYSE.


What existed then was the de facto separation of ownership from management at the NYSE. Separation by boards of directors and their managements from the owners of an entity has never served any organization well. The problems experienced by the NYSE in 2003 were, in part, symptoms of that lack of accountability. The irony in all of the events of that period is the fact that one of the groups who suffered the most has also been the most penalized – the individual owners of the NYSE. For example, as a result of abuse stemming from the lack of accountability to owners, the owners were officially disenfranchised in a “take it or leave it” ultimatum wherein they were deprived of direct representation on the NYSE’s board of directors. Yes, we all know about the importance of optics, but we also know that every time democracy has been curtailed, the excuse has been some greater responsibility during a period of crisis. To complete this irony, the current structuring of the NYSE’s governance model is a flagrant violation of the spirit and intent of Sarbanes–Oxley legislation, yet the NYSE demands compliance with Sarbanes-Oxley from all of its listed companies. Over the past few years, corporate America has witnessed a rising up of shareholder activism. Patronizing, arrogant and distant boards and managements are no longer being tolerated. Shareholders are not asking for a day-to-day role, however, they are demanding progress in their interests, accountability, visibility and clearly articulated visions and plans for the companies in which they have ownership. This movement has also been sanctioned by legislators and regulators of all political stripes. The NYSE is now faced with external challenges and some would suggest that these be dealt with first, before considering strategy, vision and accountability. America has, throughout its history, dealt with severe internal and external threats without curtailing the democratic process. No less should be expected of the NYSE.


The point to this discussion is the clear desire on the part of a large portion of the NYSE’s ownership to move to a “for profit” basis, as well as a more traditional governance model. The reasons are clear and irrefutable – accountability, responsiveness, efficiency, growth, the ability to act as a consolidator, the ability to attract and keep top management talent, access to capital, participation in the overall profits of the NYSE and, in the future, the strength which comes from a wide ownership base. For example, thousands of letters from shareholders re. NMS would serve us better than the mere handful which have been sent. One could go on in support of the incredible possibilities for the NYSE through following this inevitable course of action. Fear and insecurity, however, are always barriers to progress. Regrettably, these emotions are being capitalized on in the current discussion, yet every objection raised to date pales against logic and the broader longterm interests of the NYSE. One obstacle appears to be the lack of understanding of the current position of stock exchanges. They are no longer icons or regulated utilities with a quasi-monopoly for the exclusive use of Members. Exchanges are in the business of providing;


1) price discovery
2) liquidity and
3) information.


They function in a highly competitive world, both domestically and internationally. Exchanges are being consolidated on a world scale and many are seeking to create their own currency, for acquisitions or growth, by moving to “for profit”, converting memberships into shares and then becoming publicly held. This movement is well underway, with exceptional properties already being consolidated. Many lesser exchanges now have market capitalizations well in excess of the NYSE. To cloak our lack of progress in terms of our national role is simply invalid. The SEC has already indicated an openness in regard to ownership. Throughout all these events, there is an array of excuses based upon developing a plan, external challenges, regulatory concerns, timing issues, no growth possibilities, optics etc.


It should also be noted that a “plan” for a “not for profit” entity would probably be inappropriate for a “for profit” entity: One is essentially static and narrow, the other more dynamic and outward looking. What comes first is a framework for reference, then a plan is developed. One thought to consider would be the fact that if a new board of directors and their management took charge of a public corporation and had not, after a year or more in place, articulated a vision for that company, there would be significant criticism arising. There has been much talk about patience and what has been accomplished to date. Many of us recognize these points but there has also been much not said and swept aside. The indication that our board does not wish to tolerate a coherent shareholder base, expecting accountability, was made clear when, at our last meeting in December, corporate ownership of seats was quietly dropped, despite two earlier-stated commitments in that regard. It was only discussed upon specific questioning by one of our Members.


The issues are clear. The owners want the NYSE’s board of directors to accept the reality that we are in business. We, as an organization, and all of our constituencies, must justify our existence on a business basis, that is, providing value. I believe, with the excellent management skills which have been assembled, we can do this. As an aside, the hybrid proposal holds significant possibilities and may turn out to be our competitive edge. We must, however, recognize that we are not a protected species. We have to compete and grow and there is only one basis on which to achieve those ends. Anyone in a first year business course can tell you that “not for profit” entities cannot compete over time with “for profit” organizations. We really do not have any choice in this matter. The good old or bad old days are gone. This desire, on the part of owners, to have the NYSE function in a “for profit” mode is not based upon short-term or self-interest by anyone, as some detractors would claim. At every meeting and in every discussion, the long-term interests of the NYSE have been paramount, as well as the interests of all of its stakeholders. Many of the large body wishing to move in this direction are highly experienced business people with a clear grasp of the issues facing the NYSE. I believe that despite all the rhetoric, letters and ‘wallnbroad’ postings our board of directors will only respond to hard numbers. For this reason I have decided to join with Robert Shaw, Charles Urstadt and many others to form a group of NYSE owners (The Exchange Members’ Association, Inc.) to move forward in this regard. We would gladly work with and co-operate with any group, association or individual who shares this vision for the long term interests of the NYSE. Should you wish to discuss this further, please feel free to contact me at the telephone number listed below or 1-800-387-0859 or E-mail me at Robert Shaw can be reached at Tel: 772-288-3495 or Fax: 772-221-3546 or Charles Urstadt can be reached at Tel: 203-863-8200 or Fax: 203-861-6755 or


Best wishes,


Thomas S. Caldwell



Net Assets per share
as of May 17, 2024
$4.77 +0.05 (+1.06%)
$5.55 +0.04 (+0.73%)