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Strategies & Market Trends : The Final Frontier - Online Remote Trading

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To: TFF who started this subject	2/3/2004 2:04:44 PM
From: TFF	of 12617

NYSE May Revise Best-Price Rule Mon Feb 2,11:52 PM ET The Securities and Exchange Commission (news - web sites) could soon deliver one of the biggest challenges to newly installed New York Stock Exchange (news - web sites) Chief Executive John Thain: changes to a longstanding rule that many of its critics believe helps the Big Board maintain its dominant market position, Tuesday's Wall Street Journal reported. The SEC's staff is recommending that the agency modify a rule requiring that markets always get investors the best price, even if it means going to a competing market to fill the order. SEC staff is recommending that in some instances, speed of execution should take precedence and markets should be able to ignore or "trade through" a superior price if getting that price would slow down execution. The recommendation is expected to be part of a broader package of market structure changes that the commission will consider later this month. Electronic markets, such as the Nasdaq Stock Market, which is controlled by the National Association of Securities Dealers, Instinet Group Inc. and Archipelago Exchange, have lobbied aggressively to have the "trade through" rule eliminated by the SEC. The NYSE's competitors have long complained that the trade-through rule unfairly gives an advantage to the Big Board, which often posts superior stock prices but tends to fill orders more slowly as it allows human brokers to compete to find the best price for customers. While electronic markets like Nasdaq execute trades automatically and immediately, getting an order filled on the NYSE can take several seconds or even a minute. Some investors say they don't have a good sense of what the best price is at a given time, since the auction-trading system dictates that the best buy and sell orders change frequently after they are published for the public to see. Wall Street Journal Staff Reporters Deborah Solomon and Kate Kelly contributed to this report.

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