NEW York Stock Exchange traders face paying a high price just to do their jobs while the cost of buying and selling shares on the Big Board is set to soar under terms of business proposed in the $6 billion with Archipelago, an electronic trading firm.

John Thain, the NYSE chief executive, called a meeting of members last night to present the “Draft S4”, a regulatory document filed with the Securities and Exchange Commission laying out the terms of the deal.

Mr Thain told The Times before the meeting that, once the deal was struck, NYSE member firms would have to buy licences to trade. The licences would replace the trading rights that are currently attributed to the members by the stock exchange seats that they own.

But close analysis of the 844- page Draft S4 shows that the proposed licences could cost New York traders dear while trading costs are also set to rise.

The NYSE claims that profits of the Big Board alone will rise from $40 million this year to an estimated $195.3 million by 2007. Some $105 million of the massive jump in NYSE profits is attributed to “the introduction of new transaction pricing and trading licences”, according to the draft S-4 document.

Meanwhile the merger also spells bad news for some NYSE staff, despite the promise of $50 million of shares as a bonus from Mr Thain.

Expenses are expected to decrease during the same period, the document states. “Reduction in operating professional services, headcount reductions from budgeted year end 2005 figures and efficiency savings” will account for most of the savings. Archipelago profits will rise from $48.9 million to $104.3 million during the period, while the combined group is expected to make $302 million of profits within two years.

The merger document shows that the NYSE made $26 million of profits in the first quarter of this year and $30 million for the whole of 2004.

The Draft S-4 contained meeting notes by Mr Thain, memos and other previously secret documents. Mr Thain said the unusually detailed document had been made public to allay fears that the deal had been struck in haste, or that the NYSE was undervalued by it.

The chief executive told The Times that the NYSE and Archipelago combine would be worth about $6 billion.

NYSE seats have recently changed hands for $2.4 million, which would give the NYSE an equity value of about $3 billion, while the exchange has about $1 billion of cash on its books.

Archipelago shares are valued at $39.40, giving the company an implied market value of more than $1.7 billion

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