Archipelago Announces Investment by Instinet; Archipelago will Seek SEC Approval to Register as Stock Exchange
CHICAGO, July 27 /PRNewswire/ -- Archipelago, a leading U.S.-based electronic
communications network (ECN) for trading Nasdaq stocks announced today that Instinet will
acquire a 16.4 percent interest in Archipelago. Financial details of the investment were
not disclosed.
Archipelago also announced that it plans to seek SEC approval to establish itself as a
registered, self-regulating stock exchange.
Instinet, a wholly owned subsidiary of Reuters Group PLC (Nasdaq: RTRSY) and the
world's largest agency broker, joins a distinguished group of investors in Archipelago.
Other investors include E*TRADE Group, Inc., (Nasdaq: EGRP), Goldman Sachs Group Inc.,
(NYSE: GS), J.P. Morgan (NYSE: JPM) and American Cert our efforts to establish a
registered electronic trading exchange that addresses the needs of institutions and
individuals alike for fast, fair execution of trades. It also demntury Companies.
Gerald Putnam, CEO of Archipelago said: "The combination of Instinet, E*TRADE, Goldman
Sachs, J.P. Morgan and American Century creates a powerful group to suppoonstrates
confidence in Archipelago's open architecture and state-of-the-art technology."
Douglas M. Atkin, president and CEO of Instinet said: "Advancing technology,
regulatory shifts and new business models are creating dramatic changes in the way
securities are traded around the world. Instinet strongly believes that efficient market
structures are critical in bringing value to all investors and issuers." He added,
"Archipelago's effort to create the new all-electronic exchange is an important move in
that direction."
In 1997, the SEC created a regulatory platform for the role of ECN capabilities in the
national marketplace. In 1998, the SEC passed regulations permitting the creation of
all-electronic stock exchanges.
On Archipelago's bid to become an exchange, Putnam said: "Archipelago has the right
technology, approach and business partners to create a self-regulating exchange. We will
work closely with the SEC to make the vision a reality."
"Instinet and Archipelago are also currently reviewing other opportunities to work
together that capitalize on some related technologies and shared market philosophies,"
said Atkin.
In May, Instinet led a Consortium that acquired a majority interest in Tradepoint
Financial Networks PLC (TFN.V), a for-profit, U.K.-based electronic stock exchange.
Archipelago is a member of the Consortium. Other members include J.P. Morgan, American
Century, Morgan Stanley Dean Witter & Co., and Warburg Dillon Read.
Archipelago, formed as a joint venture with software developer, Townsend Analytics, is
one of the original four ECNs approved in January 1997 by the U.S. Securities and
Exchange Commission (SEC). Since its inception, Archipelago has offered subscribers
outbound order preferencing to effectively create a national limit order book for Nasdaq
stocks. Its leading-edge technology, open architecture and innovations, such as sweep
functionality based on a proprietary algorithm, 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 investors
fast, cost-efficient and anonymous access to the market. Its average daily volume has
more than doubled since December.
Instinet, founded in 1969 as an agency broker, is now the global leader in agency
brokerage and the development of innovative electronic trading technology, offering
equity trading, research and direct electronic access to global markets. Instinet is a
member of 17 exchanges in North America, Europe, and Asia. Instinet pioneered the use of
advanced technology to improve the trading performance of investment professionals
worldwide. That principle still guides its growth and development as a leader in
providing electronic brokerage services to investors and issuers in the world markets.
Instinet is a member of 17 exchanges in North America, Europe, and Asia, and has offices
in New York, London, Paris, Frankfurt, Zurich, Hong Kong, Tokyo, Sydney and Toronto.
NOTES TO THE EDITOR:
Background on other Archipelago investors:
E*TRADE, a global leader in online personal financial services, has emerged as the
world's most-visited online investing site. The content-rich Destination E*TRADE web
site offers value-added investing and research features, premium customer service and a
fully redundant, proprietary Stateless Architecture(SM) infrastructure. E*TRADE intends
to expand its global positioning by launching branded web sites in the top 20 financial
markets worldwide. In recognition of its innovation and industry leadership, E*TRADE was
ranked the best online brokerage by Gomez Advisors (Summer 1999) and Lafferty Information
and Research Group (4Q98, 1Q99). E*TRADE was also the first securities and financial
services company to be awarded both the WebTrust seal of assurance by the American
Institute of Certified Public Accountants (AICPA) and the "Trustmark" seal of approval
from TRUSTe.
Goldman Sachs is a leading global investment banking and securities firm, providing a
full range of investing, advisory and financing services worldwide to a substantial and
diversified client base, which includes corporations, financial institutions, governments
and high net worth individuals. Founded in 1869, it is one of the oldest and largest
investment banking firms. The Firm is headquartered in New York and maintains offices
in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the
world.
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.
American Century serves nearly 2 million individual and institutional investors.
Through its broad selection of nearly 70 mutual funds, the company manages approximately
$90 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.
/CONTACT: Mary Lyn Kurish of Archipelago, 312-960-0725; Arsenio Oloroso of Hill &
Knowlton, 312-255-3074, for Archipelago; Terrence Mulry, 212-310-9554, or Lorrie Harte
Benwell, 0171-680-3008, both of Instinet Corporation; Dave Murray of Neal-May &
Partners, 650-328-5555, ext. 114, for E*TRADE Group Inc., Chris Molanphy of J.P. Morgan,
212-648-8213; or Chris Doyle of American Century, 816-340-4638/
08:34 EDT |
