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To: Pigboy who wrote (2723)	7/22/1999 9:27:00 PM
From: GS_Wall Street	Read Replies (2) \| Respond to of 10027

How will ECNs compete with MMs. In the here and now they don't. MM provide better liquidity. And better pricing due to Order Flow. ECNs are less expensive ways to trade. Here and now ECNs get in the way, in other words you usually have to trade through them, to move a stock in either direction. ECN's by themselfs do not provide better pricing, all they do is get the price that you specify, you either get filled or you don't. I don't see any competion from the ECNs unless market machanics change dramatically, and I don't see that happening anytime soon.

To: Pigboy who wrote (2723)	7/23/1999 2:01:00 AM
From: Sir Francis Drake	Respond to of 10027

Pigboy, thank you for your kind words. Re: 1) Etrade uses both NITE and Archipelago. 2) I have not heard of NITE hooking up w/ INCA. They already have a position in BRUT, and may be looking to expand their role w/ ECNs, though I am not privy to the exact plans. 3) Add ATTN (Attain) to your list. More ECNs are planned, yes the SEC is not crazy about more of 'em coming online, there will be some consolidation down the line as there is not enough volume on many of them. INCA and ISLD are the biggies w/ BTRD and REDI also reasonable volumewise. It is my personal opinion that the role of ECNs will grow, there will be consolidation among them, and they are most certainly a threat, a mortal threat to NITE. HOWEVER, it seems that NITE is aware of the ECN issue, and they are taking measures to coopt them to some degree, and they are also making moves to insulate their business from the ECN fallout (expansion abroad, options etc.). Of course for smaller issues, NITE (and MMs) will always be indispensable. This is a very complicated issue, and the hour is late so, I'll take a pass from discussing it any further at this time. Good luck! Morgan