[  by Howard Haykin]

The controversial NYSE Euronext pilot program, aimed at attracting retail investors, is reportedly off to a good start, according to CFO Michael Geltzeiler.  About 6 million shares are trading through the pilot program each day - compared with 6.5 billion shares, the average daily U.S. equitities volume for the first 8 months of 2012.  

Mr. Geltzeiler, speaking at the Barclays Plc conference in New York, admitted that the pilot is not a "huge initiative," and referred to it as an "interesting strategic initiative."  It's a business we feel we ought to be able to play in and the SEC is allowing us to."

The 12-month pilot program, which runs until 8/1/13, allows exchanges to compete with wholesalers or securities firms owned by Citigroup and UBS that execute orders for individual investors sent from retail brokers. Executions through the retail liquidity program must occur at least 1/10th of a cent better than the best price at which other market participants can trade.

On 8/9, for instance ... the exchange handled transactions across 281 companies, involving almost 2.7 million shares, with an average of $0.0016 in price improvement per share.  The average trade size in the program was about 2,300 shares, compared to less than 300 in NYSE-listed companies at the exchange operator.

Brokers supplying orders for retail clients on NYSE include high-frequency firms Hudson River Trading LLC, Getco LLC, RGM Advisors LLC, Tradebot Systems Inc., and 2 units of Virtu Financial LLC, according to NYSE Euronext.    [Bloomberg, via Traders Magazine, 9/12/12]