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To: oilbabe who wrote (4001)	9/15/1999 7:38:00 PM
From: gbh	Read Replies (1) \| Respond to of 10027

ECNs Sign Pact to Link After-Hours Orders By Caroline Humer Staff Reporter 9/15/99 7:31 PM ET Electronic trading systems are coming together to try to improve the credibility of the nascent after-hours trading market. After about four weeks of wrangling, eight different electronic trading companies are expected to announce Thursday that they will try to improve transparency by linking their systems and building a consolidated order book, according to three people with knowledge of the agreement. The pact is an attempt to produce more order flow, and thus a more liquid and representative after-hours market, which until recently had been the province of institutional investors. After-hours platforms open to individual investors launched this summer but haven't attracted a wave of investors. The following ECNs have signed the document: Instinet, owned by Reuters (RTRSY:Nasdaq); Island, owned by Datek Holdings; Archipelago; BRUT; Strike Technologies; REDIbook, a venture of Fidelity, Charles Schwab (SCH:NYSE), Speer Leads & Kellogg and Donaldson Lufkin & Jenrette (DLJ:NYSE); Bloomberg's Tradebook and MarketXT, these people said. The agreement may have larger implications. "Anything that can bring after-hours to mirror the daytime is a huge positive," said Greg Smith, an online financial services analyst with Hambrecht & Quist. And, he said, it will likely push the Nasdaq and the NYSE to consider their own stances. "All along I think the exchanges have felt the heat and are under the gun to respond, so I think it will push them." The agreement stipulates that the various trading systems will contribute to a consolidated tape, improving investors' chances of getting the best possible execution of their order during the lightly trafficked after-hours sessions. Uniting orders from disparate systems, in the best-case scenario, may produce a more vibrant market. Critics of after-hours trading have said the current separation of markets hurts investors. For example, an investor trading during MarketXT's evening session currently can't see an order from a customer that has placed an after-hours trade through Island or Instinet. "It's an attempt to legitimize after-hours," said one of the people. "One of the biggest complaints has been fragmentation." The agreement doesn't spell out which trading systems will connect to which other systems, and it doesn't say how this consolidated tape, which would allow investors to see other systems' quotes, will be built. It also doesn't establish any specific timeline. After-hours trading has gotten the attention of investors nationwide this summer with the launch of MarketXT earlier this month. The all after-hours trading system runs from 6 p.m. EDT to 8 p.m. EDT, trading the top 100 stocks on the Nasdaq and the top 100 on the NYSE. The exchanges themselves haven't gotten involved in after-hours trading, waiting until 2000 in part because of regulatory pressure to proceed carefully. MarketXT is competing with the Island ECN, which is available from 8 a.m. EDT to 8 p.m. EDT as of today. The firm has about 200 subscribers, 73 of which have used its after-hours service. Island is the ECN of choice for Datek, which also extended its trading day Wednesday to add morning and evening trading. Other online brokerage firms, like DLJdirect, Schwab and E*Trade (EGRP:Nasdaq), say that they are going to be getting into after-hours trading and will use ECNs. So while after-hours trading has started slowly, academics and analysts expect it to pick up, particularly once the exchanges get involved.