As NYSE Arca is part of the New York Stock Exchange, it provides investors with access to a diverse array of investment products, facilitating the buying and selling of securities in a transparent and regulated environment.

NYSE Arca, formerly known as the Pacific Exchange (PCX), was founded in 1882. It initially operated as the San Francisco Stock and Bond Exchange.

In 2006, the exchange was rebranded as NYSE Arca in 2006 and integrated into the New York Stock Exchange. 

Traders can buy and sell ETFs tracking some of the most popular stock market indices, such as the S&P 500, Nasdaq-100, and the Dow Jones Industrial Average, among many more. 

To better understand how the NYSE Arca functions, we can look at the different aspects of the exchange.

Electronic Trading

Unlike traditional open outcry trading floors, NYSE Arca operates as an all-electronic exchange.

This means that all trading on the platform occurs electronically, providing efficiency and speed in the execution of trades.

In this sense, NYSE Arca is more similar to the Nasdaq than it is to the New York Stock Exchange, which still operates a physical trading floor to this day. 

Listing & Trading Of ETFs

NYSE Arca is particularly known for being a leading exchange for ETFs. It lists and trades a wide range of ETFs covering various asset classes, including equities, fixed income, commodities, and more.

The exchange has played a significant role in the growth and development of the ETF industry, as well as the popularization of electronic trading of ETFs.

Market Structure

NYSE Arca operates on a market model that includes market makers and liquidity providers.

Market makers play a crucial role in maintaining liquidity by quoting bid and ask prices for securities, facilitating trading for investors.

Much like any other securities exchange, traders can access NYSE Arca via regulated brokerages.

Regulation

Like other securities exchanges in the United States, NYSE Arca is regulated by the U.S. Securities and Exchange Commission (SEC).

It must comply with SEC rules and regulations to ensure fair and transparent trading practices.

This includes AML and policies against insider trading, among many others. 

Revenue

The exchange generates revenue through various channels, such as listing fees, which are charged as one-off and recurring fees. These fees contribute to the exchange's revenue and are based on factors such as the type of security being listed and the issuer's financials.

Furthermore, NYSE Arca also provides market data to institutional investors, which is also done for varying fees based on the data package required by investors. 

NYSE Arca charges transaction fees to market participants for executing trades on its platform. These fees can vary based on factors such as the type of security being traded, the volume of trades, and whether the market participant is a liquidity provider or a taker. 

• NYSE Arca is a subsidiary of the Intercontinental Exchange and serves as the ETF exchange of the NYSE
• The exchange was launched in 2006 in its rebranded form as a part of the New York Stock Exchange
• The exchange generates revenues via listing and trading fees, as well as market data subscriptions for institutional investors 
• NYSE Arca is a fully digital exchange that operates without a physical trading floor, while the NYSE does have a trading floor