Electronic Communications Network Archipelago Receives Major Investment From J.P. Morgan, American Century
PR Newswire - June 10, 1999 09:00
Firms Join E*TRADE and Goldman Sachs as Major Investors in Archipelago
CHICAGO, June 10 /PRNewswire/ -- Archipelago, a premier U.S.-based Electronic Communications Network (ECN) for Nasdaq stocks, today announced that a leading financial services company, J.P. Morgan & Co. Incorporated (NYSE: JPM), has agreed to acquire a 20 percent interest in Archipelago. A portion of the Morgan investment represents an indirect 5 percent economic interest by American Century Companies in Archipelago.
Under the agreement, J.P. Morgan will acquire an interest in Archipelago and its alternative trading system. Financial details of the investments were not disclosed. The consortium of investors in Archipelago also includes E*TRADE Group Inc. (Nasdaq: EGRP) and Goldman Sachs Group Inc. (NYSE: GS). Other international financial institutions also have expressed an interest in investing in Archipelago.
Archipelago is one of the original four ECNs approved in January 1997 by the U.S. Securities and Exchange Commission (SEC). Its leading-edge technology and open architecture allows for outbound order preferencing to ensure the best execution for investors. Archipelago is also the only ECN with major investors in both the institutional and retail financial services sectors. The Archipelago trading system provides institutional and individual investors fast, cost-efficient and anonymous access to the market. Archipelago's average daily volume has more than doubled since December.
ECNs have played a growing role in equities trading since 1997, when the SEC implemented regulatory changes requiring full integration of electronic trading networks into the national marketplace. Currently, ECNs account for approximately 30 percent of the market activity on Nasdaq.
"The investment in Archipelago by J.P. Morgan and American Century will further strengthen our position as a leader in the electronic trading market," said Gerald Putnam, chief executive officer of Archipelago. "Archipelago's investors are the major players among institutional and retail investment services providers."
"J.P. Morgan recognizes the significance of electronic trading to the evolution of financial markets around the world," said Clayton Rose, global head of J.P. Morgan's equities business. "We view Archipelago as a core asset in our effort to provide clients with best-execution capabilities, across a variety of domestic and, potentially, international equity markets."
"Our economic interest in Archipelago signifies our strategic intent to sponsor technology that ultimately will lower trading costs for our investors and generate higher investment returns," said Harold Bradley, senior vice president of American Century. "We believe the open architecture of the Archipelago system makes it a likely winner in the technology revolution sweeping U.S. capital markets."
Archipelago recently joined an investment consortium that plans to acquire a majority interest in Tradepoint Financial Networks PLC (Vancouver: TFN), a U.K.-based electronic Recognized Investment Exchange. Other members of the Tradepoint consortium include J.P. Morgan and American Century, as well as Instinet Corp., Morgan Stanley Dean Witter & Co. and Warburg Dillon Read LLC.
About Archipelago
Archipelago, one of the four original approved ECNs, was integrated into the Nasdaq marketplace on January 20, 1997. Archipelago serves a varied customer base that includes Nasdaq market makers, online retail brokerage firms, institutional investors, proprietary traders and options market makers. Archipelago believes that marketplace transparency, fair and expeditious access, and competition are necessary to assure market quality and efficiency, which substantially benefit investors. In support of these principles, Archipelago was the first ECN to offer outbound order routing -- based on a proprietary algorithm -- to allow its participants to access external liquidity. Further, Archipelago is an active participant in the marketplace policy formation process, which is conducted by the SEC and the National Association of Securities Dealers Inc.
In January 1999, Archipelago received investments from both Goldman Sachs and E*TRADE.
About J.P. Morgan
J.P. Morgan is a leading global financial firm that meets critical financial needs for business enterprises, governments, and individuals. The firm advises on corporate strategy and structure, raises capital, makes markets in financial instruments, and manages investment assets. Morgan also commits its own capital to promising enterprises and invests and trades to capture market opportunities.
About American Century
American Century serves nearly 2 million individual and institutional investors. Through its broad selection of nearly 70 mutual funds, the company manages approximately $85 billion in assets. American Century has offices in Kansas City, San Francisco, Singapore, Greenwich, and Denver. James E. Stowers Jr. founded the company in 1958 and serves as chairman. His son, James E. Stowers III, is chief executive officer, and William M. Lyons is president and chief operating officer.
About E*TRADE
E*TRADE is a leading brand provider of online investing services and has established a popular destination web site for self-directed investors. E*TRADE received the top ranking on the Internet Broker scorecard for Summer 1999 from leading independent industry analyst Gomez Advisors and, in the fourth quarter of 1998, was named the No. 1 online investing site in an international survey of the industry's top 20 Internet brokerage firms by Lafferty Information and Research Group, a global provider of high-value and business information research.
Contact: Dave Murray of Neale-May & Partners for E*TRADE Group Inc., 650-328-5555, ext. 114; Mary Lyn Kurish of Archipelago, 312-960-0725; Chris Molanphy of J.P. Morgan, 212-648-8213; or Beth Randolph of American Century, 816-340-7673.
SOURCE E*TRADE Group Inc.
/CONTACT: Dave Murray of Neale-May & Partners for E*TRADE Group Inc.,
650-328-5555, ext. 114; Mary Lyn Kurish of Archipelago, 312-960-0725; Chris
Molanphy of J.P. Morgan, 212-648-8213; or Beth Randolph of American Century,
816-340-7673/
/Company News On-Call: prnewswire.com or fax,
800-758-5804, ext. 136683/
/Web site: nealemay.com
/Web site: americancentury.com
/Web site: jpmorgan.com
/Web site: tradearca.com
/Web site: etrade.com
(EGRP JPM GS TFN.)
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