The New York Stock Exchange says that its inaugural trading license auction produced 1,274 licenses at an annual price of US$49,290 each.

The licenses will become valid following the close of the exchange’s merger with Archipelago Holdings Inc., which is expected later this quarter. The number of trading licenses sold exceeds the current number of seats actively being used for trading in the NYSE market today.

The actual price for 2006 trading licenses will be pro-rated for the amount of time remaining in the year at the closing of the merger. The exchange will allow firms that wish to purchase trading licenses following the auction to do so throughout the year at a pro-rated annual rate of US$54,219, which is 10% above the auction price, until 1,366 licenses have been issued.

The auction, a modified Dutch auction, required firms to submit bids before 12 noon on Tuesday, January 3 for the right to directly access the post-merger NYSE Market. Bidders had the option of submitting “market bids” to guarantee acquisition of a trading license at the clearing price or “priced bids” which helped establish the fair value of the 2006 trading license.

For the 2006 SEATS auction, the NYSE established a maximum bid price for each trading license of US$73,935, which is a 20% premium to the average annual lease price for seat leases commenced during the six-month period ending October 30, 2005, and the US$49,290 minimum bid price which corresponds to a 20% discount to the average annual lease price for leases commenced during the same period. The exchange expects to generate over US$60 million in new revenue on an annualized basis from the sale of trading licenses, adding to the diversification of its income.

“We were very pleased with the results of the NYSE’s inaugural SEATS auction, and the response from our member organizations was extremely positive,” said NYSE CEO John Thain. “Our goal was to create a fair, equitable and transparent system that would reflect the value of the license to directly access the world’s highest-quality and most liquid equity capital market. It’s also a way for the exchange to generate revenue that supports our business growth.”