Goldman, Merrill To Set Up Trading System To Compete With NYSE, NASDAQ...
NEW YORK (Reuters) - Wall Street powers Merrill Lynch and Co. Inc. and Goldman Sachs Group Inc. said Tuesday they are setting up an electronic stock trading system to compete with U.S. exchanges for customer orders by reducing the cost of buying stocks.
Investment bank Goldman Sachs and Merrill, the No.1 U.S. brokerage firm, said they will partner with New York stock trading firm Bernard L. Madoff Investment Securities, a market maker known for its innovative ways to trade stocks outside of traditional markets.
Unlike electronic communications networks (ECNs), which match buyers and sellers at a certain price, the new venture, called Primex Trading NA, plans to use an auction system to narrow the difference between the bid and offer prices on a stock, or its spread.
''We always are trying to do better than the best publicly available bid-offer (on a stock) that is in the market,'' said Peter Madoff, senior managing director of Madoff Securities, recognized for its innovation in the brokerage industry.
The system is scheduled to be operational by June next year and will be available to broker-dealers only.
Primex is the latest innovation to affect the way stocks are traded in the U.S. The changes are being driven by new technologies, customer pressure for low cost stock trading and Americans' infatuation with the stock market.
ECNs already have attracted business from U.S. stock exchanges by offering customers cheap trade processing, or execution, during regular market hours and beyond. The Nasdaq electronic stock market and the New York Stock Exchange, have responded by considering longer hours and possible alliances with ECNs.
With its powerful Wall Street backers Primex is trying to appeal to brokers, stock dealers and ECNs to use its system in the hope of obtaining the best prices for their customers..."
SOURCE: © 1999 (Reuters) Tuesday June 8 2:33 PM ET dailynews.yahoo.com |
