NYSE & Tokyo Exchange: An intriguing alliance

NYSE Group Inc. (NYSE:NYX), operator of the New York Stock Exchange, announced Wednesday it would form an alliance with the Tokyo Stock Exchange, the largest stock market in Asia.

Under agreement terms, the two exchanges will establish working groups that concentrate on technology, promotional activities and listings.

Wall Street's initial response was muted as analysts waited to see if the announcement would lead to a sharing of ideas or a complete inter-hemisphere stock exchange system. NYX already has plans to merge with Paris-based Euronext, which contains the Paris, Brussels and Amsterdam exchanges. NYX's shares drifted slightly lower on the news, down 47c to $100.28 in Wednesday afternoon trading.

A truly inter-continental stock exchange would need standardized symbols, execution, transparency and, equally significant, no major additional "fee" for those U.S. investors trading a Tokyo stock, and vise-versa.

Moreover, from a consumer standpoint, that last point is critical as similar to bank ATM fees, stock traders will shun excess charges/fees. Hence, until more is known regarding the NYSE/Toyko alliance's fee structure, traders, like analysts, will take a wait-and-see approach regarding the alliance's ultimate benefits.