The following editorial appears on Bloomberg View:

The name on the building will remain and the opening bell will continue to ring every trading day. But an era is about to end, sadly, with the agreement by the New York Stock Exchange to sell itself to IntercontinentalExchange Inc.

The contrasts between buyer and seller are stark, and go a long way to explain the deal's backstory: The NYSE is the world's largest stock market where the trading floor and colonnaded structure in the heart of Wall Street are symbols of American-style capitalism.

ICE, as the buyer is known, offers mostly electronic futures trading and clearing. For better or worse, the NYSE and its focus on a shrinking equities market is the past, and ICE, which specializes in the booming derivatives business, is the future. The wonder isn't why the NYSE is being acquired by an arriviste, but what took so long.

Even if ICE keeps the NYSE and its floor intact, as it has promised NYSE officials and New York's congressional delegation, it is a bittersweet moment for the Big Board. Its roots go back to 1792, when merchants gathered under a buttonwood tree on Wall Street to trade Revolutionary War bonds.


The NYSE's reputation had faded over the last decade for many reasons, including a scandal in which floor traders were accused of collusion. Former Chairman Richard Grasso's $140 million pay package in 2003 highlighted the old-boy atmospherics.


ICE, at any rate, isn't interested in trading stocks. Instead, it's looking to build up a global derivatives trading operation. To that end, it is eager to get its hands on the NYSE's London-based futures market, known as Liffe, which is a dominant player in interest-rate futures.

Meanwhile, seismic changes are about to hit markets around the world. Regulations to enforce the Dodd-Frank financial reform law will require trillions of dollars' worth of derivatives trades to go through clearinghouses, which hold collateral from both parties to a trade to reduce the risk that a default will harm the entire financial system.

Just as exchanges are preparing for all of this, regulators must, too. It won't be long before traders are more interested in getting a slice of risk, such as exposure to fast-growth startup companies or the liquefied natural gas business, and agnostic about the venue or the specific type of instrument.

In this converging world, an exchange that can offer platforms to trade and clear all those instruments might be the big winner. The United States's fragmented regulatory system, in which the Securities and Exchange Commission oversees equities and the Commodity Futures Trading Commission regulates commodities, will have to adapt — perhaps even merge, as well.