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To: Ish who wrote (24582)	2/10/2000 10:45:00 PM
From: Mephisto	Read Replies (2) \| Respond to of 24894

Instinet CEO sees flaws in U.S. market structure By Peter Ramjug WASHINGTON, Feb 10, The U.S. securities market structure lags behind those of other countries because of a lack of competition and innovation, Instinet Corp.'s chief executive officer said on Thursday. The United States despite being a world leader in technology, does not have an electronic stock exchange, said Doug Atkin,president and CEO of Instinet, the big New York-based electronic brokerage owned by news and information provider Reuters Group Plc (quote from Yahoo! UK & Ireland: RTR.L) (NasdaqNM:RTRSY - news). ''The simple fact of the matter is that in the United States, which by all accounts leads the world in technology, we still do not have an electronic stock exchange,'' he said in a luncheon speech in Washington. He spoke specifically of the advances that Europe had made in developing an electronic exchange. The advent of the single euro currency, exchange demutualization and the development of electronic, floorless exchanges has put Europe ''significantly ahead of the U.S. in terms of market structure.'' ''We dominate the investment banking industry ... but the best market structure and market design are currently in other countries,'' he said, adding that Instinet's revenues in the last year in the European and Asian markets were in excess of $200 million. Atkin, who has been Instinet's CEO for about a year, proposed several ideas on how the U.S. markets needed to evolve. He called on the U.S. Securities and Exchange Commission to ''provide a clear path'' for electronic communication networks (ECNs) like Island and Archipelago, that have applied to the SEC to become exchanges. Specifically, the SEC should put what Atkin called ''price time priority'' into the Intermarket Trading System (ITS), which currently links U.S. exchanges, so that the ECNs and other entities who want access to ITS can all see the best stock prices. ECNs currently do not have access to the ITS. In other words, ''the first exchange that has the best price in the country, that's where the stock should trade,'' Atkin explained. He also recommended that market orders by small and large investors should be mixed in a big electronic pool. ''Right now investors just don't have a choice on who they trade with,'' he said. ''They trade with the (brokerage) firm but they do not have a choice to have their orders directly interact in a big electronic pool with institutional and other retail investors.'' In a step toward meeting some of these needs, Instinet has formed Instinet.com as a vehicle to go retail. The retail offering will be a real-time trading system in which institutional and retail orders directly interact in over 40 markets around the world, Atkin said."