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Non-Tech : E*Trade (NYSE:ET) -- Ignore unavailable to you. Want to Upgrade?

To: Spytrdr who wrote (9219)	11/5/1999 9:18:00 AM
From: Spytrdr	Read Replies (1) \| Respond to of 13953

Goldman Sachs Chairman Urges Firms To Support Electronic Central Market By RANDALL SMITH Staff Reporter of THE WALL STREET JOURNAL BOCA RATON, Fla. -- Goldman Sachs Group Inc.'s chairman and chief executive challenged other securities-industry executives to join a group of firms pressing for moves toward "an electronically driven central market." The public comments by Henry M. Paulson Jr. promise to raise the profile of a quiet Wall Street campaign to seek changes in New York Stock Exchange rules. He argues that U.S. markets must act now or lose their advantage to overseas competitors who are moving more quickly toward electronic-trading platforms. In a speech before the Securities Industry Association's annual meeting here, Mr. Paulson endorsed a call two months ago by Arthur Levitt, chairman of the Securities and Exchange Commission, for the creation of a "central-order book" linking various exchanges and for the elimination of a NYSE rule limiting its members' participation in trading venues called electronic commerce networks. Those Wanting Splinters of Big Board Must Wait, With IPO Target of Late '00 (Oct. 29) Grasso, Zarb Differ on Self-Regulation of Stock Markets Once They Go Public (Sept. 29) Goldman, which has invested heavily in several ECNs as well as an electronic-market maker, Hull Group, has played a prominent role in a group of firms that also includes other New York firms Morgan Stanley Dean Witter & Co. and Merrill Lynch & Co. in pressing for market-structure reform. In recent weeks, the group's participants have expanded to include executives from Fidelity Investments, the Boston mutual-fund company, the Salomon Smith Barney securities unit of Citigroup Inc., New York, and Edward Jones & Co., a St. Louis brokerage firm. Mr. Paulson cited three examples where "exchanges abroad seem to be moving forward, some at lightning speed," and he urged action "now, while the NYSE and the Nasdaq Stock Market are still the envy of the world, rather than rushing to respond" later. Last month, he noted, the eight major European stock markets "announced an alliance to implement ... a common market model with a single electronic interface and harmonized 24-hour trading." When the German stock market in 1996 decided to allow electronic and traditional-exchange trading side-by-side, 92% of trading migrated to the electronic platform within two years, Mr. Paulson said. He also cited a small French futures market that suspended floor trading within a month after allowing electronic trading. Mr. Paulson criticized as "vested interests" some barriers, such as NYSE rules blocking electronic-trading developments in the U.S. With limits on NYSE members' participation in ECNs and a lack of links among them, he said, "trading volume is increasingly fragmented among regulated exchanges, the Nasdaq market and new alternative trading systems." Asked what sort of future his vision includes for New York Stock Exchange specialists -- the floor brokers who process trades manually -- Mr. Paulson indicated they may not be needed for trading the 1,000 most-active stocks out of the Big Board's 3,500 issues. Only in the other "less-liquid issues," he said, does he "see a continuing role" for the specialists. Separately, Mr. Levitt stepped up his criticism of "payment for order flow" by some securities firms, which receive such payments without making detailed disclosure to customers of the costs and tradeoffs inherent in doing so. Write to Randall Smith at randall.smith@wsj.com