NYSE Vice-Chairman & CCO John Tuttle discusses the temporary move to fully electronic trading after two NYSE employees test positive for COVID-19. He also talks about the volatility in the markets and when the trading floor is expected to reopen.

Video Transcript

LULU CHIANG: Joining us is John Tuttle, the Chief Commercial Officer and Vice Chairman at the NYSE. John, two people tested positive for the Coronavirus earlier this week at the NYSE. Give us an update on the situation.

JOHN TUTTLE: Well, thanks for having me on. Well, first of all, what the impact we've seen of Coronavirus across not only the city, New York City, New York state, the country and the world, has been pretty profound over the past few months, and particularly the past few days. At the New York Stock Exchange, we are an important part of America's marketplace, not only because we operate financial markets, equities markets, but because of the symbolism of the New York Stock Exchange.

So earlier this week, we decided to put a very robust screening process in place at the New York Stock Exchange. We, after deep cleaning the building over the weekend, we screened every person coming into the New York Stock Exchange. And those that exhibited some sort of symptoms or may have been flagged for secondary screening, were tested.

Yes, two had posted positive, but those folks had never made it onto our trading floor. So from our standpoint, we're first and foremost focused on the safety and well-being of those in the building, and making sure we operate markets during this very important time for not only the country, but the world.

LULU CHIANG: Starting on Monday, you are making even more of an unprecedented move, by going fully electronic.

JOHN TUTTLE: We are. We are going fully electronic on Monday. We are temporarily doing that as part of our business continuity planning. We expect uninterrupted service for NYSE-listed companies. For investors as well. But we believe it's the prudent move, given the fluidity of the situation, not only New York City, but around the world with regard to COVID-19.

LULU CHIANG: What are the backup plans if there is a hiccup in the primary system?

JOHN TUTTLE: Well, first of all, we regularly test all of our systems at the New York Stock Exchange, including our fully electronic systems. And taking a step back, we operate various markets at the New York Stock Exchange. In fact, we already operate two fully electronic listing venues in NYC, Arca and NYSE American. So shifting the NYSE to a purely electronic platform is not something that's going to be new for us. We operate electronic markets flawlessly. We test our markets as well for moments like this.

So from our standpoint, many of the market participants that are there on the floor on a given day, will be participating electronically and remotely. And they are going to be there with the same liquidity requirements and the same accountability that they would have if they were in our 11 Wall Street building. We also have lots of redundancy built into our system. It's an important part of how we operate our business and the regulatory framework that governs the markets.

LULU CHIANG: Is this taxing the system too much, I mean, given the volatility that we're seeing in the marketplace and going fully electronic?

JOHN TUTTLE: There has been a lot of volatility in the marketplace, and it's amazing to see double digit percentage-wise swings in the S&P 500 and the Dow Jones Industrial Average. But this is really what our market model was purpose built for. It's to help dampen volatility, provide liquidity in these moments. And from our standpoint, given the tremendous uptick in messaging and volumes as well, our systems have performed remarkably well.

LULU CHIANG: Is this the end of an era with humans on the trading floor?

JOHN TUTTLE: Absolutely not. We believe, and the data fully supports, that human beings interacting with increasingly sophisticated technology brings about the best outcomes. That's for listed companies. That's for investors. And so when the time is right, and we'll continue to monitor events to determine when that is, we look forward to reopening our iconic trading floor and bringing those services back to the marketplace.

LULU CHIANG: So as of right now, there's no timeline as to when you would reopen the floor for trading.

JOHN TUTTLE: Well, given the fluidity of the situation, we can see how much has changed not only in the course of the past week, but the past day as well. We'll continue to monitor the events closely and make a decision when the time is right.

LULU CHIANG: We've seen 1,000, 2,000 point swings in the Dow in the recent weeks. Do you expect that to continue?

JOHN TUTTLE: Well, certainly there's been market volatility in response to Covid-19, and investors' perceived impact that will have on the global economy and the US economy, in particular. A lot of it changing, but I am long-term optimist. In the 228-year history of the New York Stock Exchange, the chart starts in the bottom left and it ends in the upper right. It's not a straight line. But we're confident that the strength and perseverance of not only New Yorkers, but all the American people get us through this challenging time.

LULU CHIANG: Well, you've been at the New York Stock Exchange before it even hit 10,000, so I'm sure you're an optimist. Given that the economy has come to a halt because of the Covid-19, what does that mean for the IPO market?

JOHN TUTTLE: Well, certainly as you can imagine, the IPO market has slowed down in this environment, much like many other businesses have slowed down in this environment. That's really for several reasons. Number one is, going through an IPO, you want to de-risk as much as possible. You want to minimize as much uncertainty as possible. So given that again, the fluidity of this situation, day by day, week by week, companies and investors would like to have a little bit more certainty about what the environment would look like.

Second of all, part of going public is meeting with investors. Sure, that can be done virtually, and probably effectively, but it still doesn't replace those face to face meetings when companies go on the road show. And number three, the markets are volatile. When the markets are volatile, you see fewer IPOs. That's just been a historic trend and frankly, a fact. So given all of that, I think people are first and foremost, focused on the well-being of their friends, family, colleagues and workforces rather than getting out to the market at a certain time.

LULU CHIANG: What are you advising clients right now? Delay the IPO? What are they telling you?

JOHN TUTTLE: Well, they're going to do what's best for them. And that's our advice. So make sure that you're talking with your advisors, your companies, your customers and others, and make the decision that's best for you in the long run. And when you're ready to come to market, we'll be ready to receive you.

LULU CHIANG: John Tuttle, Vice Chairman, Chief Commercial Officer the New York Stock Exchange, thank you for joining Yahoo Finance.

JOHN TUTTLE: Thanks so much for having me, and stay safe.