ENDING A NYSE TRADITION: THE 1975 UNRAVELING OF BROKERS’ FIXED COMMISSIONS AND ITS LONG TERM IMPACT ON FINANCIAL ADVERTISING

On May 1, 1975 (“Mayday”), the New York Stock Exchange jettisoned its 183 year old tradition of fixed rate broker commissions in favor of competitive, negotiated rates. While many events, institutions, and individuals helped inspire this controversial policy change, this paper focuses on the pivotal role played by one Exchange insider, NYSE President Robert Haack. Despite his original stalwart defense of fixed rates, Haack came to support rate deregulation. Haack’s rationale for endorsing negotiated rates is evaluated as well as how the new commission fee structure led to surprising changes in the advertising landscape on Wall Street. This paper argues that Mayday transformed the securities industry in more ways than anyone had envisioned at the time.