“On a day of trading clouded by fears of a potential terrorist attack, John A. Thain, the chief executive of the New York Stock Exchange, announced yesterday his long awaited plan to increase electronic trading that could diminish the historic role of floor traders,” writes Landon Thomas in today’s New York Times.

“His proposal, which will allow institutional investors to trade large blocks of stock electronically, is a radical shift for the exchange and its 1,366 members. It is all the more ambitious by being introduced during a time of nervousness in the markets with the onset of rising interest rates, terrorist threats and political uncertainty.”

“Yesterday morning, the stock exchange building, with its soaring columns adorned with a large American flag, became a powerful political stage, just as it did after the Sept. 11 attacks. After the weekend news that the exchange and other financial institutions were possible targets of terrorist attacks, New York’s leading politicians were at the exchange, from Senator Charles E. Schumer, who greeted traders as they entered the building in the morning, to Gov. George E. Pataki and Mayor Michael R. Bloomberg, who rang the opening bell.”

“ ‘We are open for business,’ Mr. Thain said yesterday as he stood before the looming statue of George Washington on the steps of nearby Federal Hall, with Senator Schumer beside him.”

“Missing from his clipped, to-the-point remarks was the patriotic oratory that emanated at times from the exchange after Sept. 11.”

“But for Mr. Thain, a former president of Goldman Sachs who directed the firm’s aggressive investments in electronic trading, his expertise lies less in promoting the exchange and more in mastering the arcane technological details that make up his new plan and persuading the Big Board’s many constituencies to adopt it.”

“Defenders of the exchange’s two-century-old open outcry system, which relies on specialist traders to use their trading acumen and capital to help investors find the best price for a stock, say that now, more than ever, the experience and know how of the floor trader is needed to ensure price stability.”

“At a news conference yesterday, Mr. Thain said that the new program, called Direct Plus, was designed so that large institutional investors like Fidelity and American Century would conduct more of their electronic trades with the New York Stock Exchange.”

“ ‘If we didn’t respond to our customer base,” he said. “They would pull their volume off and trade on the electronic markets.’ “

“The stock exchange’s market share is 80 percent, having dipped to a low of 75 percent in January during the controversy over the pay of Richard A. Grasso, the former chief executive.”

“Institutional investors have long complained that they cannot trade with speed and anonymity at the exchange and as a result they have directed much of their trading to the Big Board’s electronic competitors.”

“The most significant new feature of the program is an expanded ability to ‘sweep’ – allowing investors trading electronically to access automatically blocks of stock at various prices, thus enabling them to increase the size of their trades.”