Traders Magazine discusses our new Supplemental Liquidity Providers pilot program. Excerpt:

These so-called supplemental liquidity providers (SLPs) must maintain a bid or an offer at the national best bid or offer in their assigned securities at least 5 percent of the trading day. In return, the NYSE will pay them a rebate of 15 cents per 100 shares when their quotes result in trades. The goal, according to the exchange, is to generate more quoting activity, leading to tighter spreads and greater liquidity at each price level.

“We’re rolling [the pilot program] out in the 500 most active names where we believe incenting SLPs by compensating them to provide liquidity will supplement all of the other initiatives that we’ve put in place to build the NYSE book,” Robert Airo, vice president of relationship management and sales at NYSE Euronext, said.

The article is as comprehensive a look at SLPs as I’ve seen anywhere. It also quotes Citadel Execution Services saying they’re considering becoming an NYSE member so they can qualify for the program, which I haven’t seen reported anywhere else.

There is only one conclusion in the piece that I’d quibble with, which is the idea that NYSE is becoming more like Nasdaq. To me, we’re moving in the exact opposite direction. Consider:

– We have Designated Market Makers, with parity and specific market-making obligations, operating in both the physical and electronic components of the market — which Nasdaq doesn’t have.

– We have Trading Floor Brokers, also with parity, acting as agent for customers, and also operating in both the physical and electronic components of the market — which Nasdaq doesn’t have.

– We have the new Supplemental Liquidity Providers, with parity via being represented on the book, and economic incentive to quote at the national best or offer — which Nasdaq doesn’t have. And as the article itself points out, SLPs will trade only for their proprietary accounts, not for public customers or on an agency basis.

I think those are key distinguishing features of NYSE, and I think they couldn’t be more different from the Nasdaq model. Just saying. I really try not to nitpick news articles, because I have an appreciation for how hard it is to do them well and also a keen understanding that I’m a wee bit biased. But sometimes I can’t help myself.

Enough from my lofty soapbox. On the historical-trivia front, yesterday I mentioned the anniversary of Black Tuesday, and you can’t do that without also mentioning the famous next-day followup:

Today in NYSE History (NYSE.com)
30 Oct. 1929 — The show business newspaper, Variety, published its famous stock market crash headline: “Wall Street Lays an Egg.”

Now that was a headline.