The future Museum of American Capitalism.

Hurricane Sandy claimed many victims. Will the New York Stock Exchange’s floor traders be among them?

The Big Board doesn’t like to close, even for the worst natural disaster to hit its hometown in recent memory, one that destroyed the certificates nominally traded on its floor even if didn’t flood NYSE’s own basement. So it’s drawing up plans to avoid having to during the next catastrophe. And that plan doesn’t involve open-outcry trading.

Of course, NYSE says it will never give up its two-century-plus old system. But it will be making those floor traders potentially redundant. And it’s never good to be the last of any legacy business.

NYSE Euronext is preparing to submit to the Securities and Exchange Commission details of its plans to cope with a forced shutdown of its historic trading floor, according to people involved in the planning.

The plan isn’t intended to supplant the Big Board’s trading floor. But, as with previous backup plans, its activation would mark the first time the 221-year-old exchange, which operates the last open-outcry venue for buying and selling stocks in the U.S., would rely entirely on computer systems to shepherd securities to market without the oversight of floor-based human traders.

Instead of keeping the NYSE open in a limited fashion, the revised plan would see all of the exchange’s functions performed by its all-electronic sister market, called Arca, while the NYSE itself would close, according to people involved in the planning. Longer term, the NYSE is planning upgrades to enable the exchange to function on an entirely electronic basis….

The initial plan being prepared by NYSE Euronext involves keeping the New York Stock Exchange and the smaller NYSE MKT exchange closed in the event of a storm or other disaster that renders the company’s downtown Manhattan location inoperable or inaccessible. The shift to Arca would make the all-electronic exchange the “primary market,” responsible for setting opening and closing prices for stocks, a critical part in the calculation of indexes and fund valuations….

The proposal would replace NYSE’s existing backup procedure, which involves keeping the NYSE and MKT stock exchanges open in a limited capacity while bouncing buy and sell orders over to Arca to be filled.

NYSE Revamps Disaster Plan [WSJ]