Goldman Sachs, a fixture on Wall Street for more than 100 years, has decided to part with a business at the symbolic heart of the industry: the New York Stock Exchange.
The investment bank is exploring a sale of its designated market-maker unit, which it bought in 2000 as part of its acquisition of the trading firm Spear, Leeds & Kellogg, according to a person briefed on the matter.
At the time, Goldman paid $6.5 billion for the firm, which operated three core businesses: securities clearing and execution, floor-based market making and off-floor market making.
Goldman is valuing the unit at about $30 million, a sign of just how much technology has changed the way Wall Street conducts its business.
Goldman and the New York Stock Exchange declined to comment. The Financial Times first reported the potential sale.
Market makers facilitate trading by buying and selling shares of public companies. Once known as specialists, the industry has largely been phased out by technology.
That has left many market makers out in the cold. Once-vital firms like Spear and LaBranche & Company have largely lost their prominence. Bank of America sold its market-making business in 2011.
But while technological advances have meant that trades can be conducted faster and more cheaply, they have also concerned regulators about whether the rules have kept up.
On Monday, it was reported that the F.B.I. was investigating high-frequency traders for potential market manipulation.
“With the overwhelming majority of transactions now done over multiple electronic markets each with its own rule books, the equity-market structure is increasingly fragmented and complex,†Gary Cohn, Goldman’s chief operating officer, wrote in The Wall Street Journal earlier this month. “The risks associated with this fragmentation and complexity are amplified by the dramatic increase in the speed of execution and trading communications.â€
