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To: Jim Bishop who wrote (41208)	4/4/2000 12:33:00 PM
From: Bram12345	Respond to of 150070

This looks like a step in the right direction. Wish they could get something for the OTC market too. April 04, 2000 12:26 Nasdaq seeks to adopt Primex auction price system Jump to first matched term By Elizabeth Smith NEW YORK, April 4 (Reuters) - The Nasdaq stock market plans to seek approval from regulators to adopt a software system designed to improve prices for stock trades by mimicking the way securities change hands on the New York Stock Exchange. The board of the National Association of Securities Dealers (NASD) will soon file with the U.S. Securities and Exchange Commission for permission to adopt the Primex trading system, a NASD spokesman said on Tuesday. It plans to introduce the new system into its market early next year, he said. "We believe the Primex auction system gives Nasdaq the opportunity to provide investors and market participants with another mechanism to receive quality executions," NASD Chairman Frank Zarb said in a statement released by Bernard L. Madoff Securities, the New York-based firm that developed Primex. The NASD said it must first devise a set of rules that would govern trading on the Primex system before it files its proposal with the SEC. Though the system would be integrated into Nasdaq's computer trading network, it would be an optional feature for Nasdaq stock dealers. Last fall, Nasdaq got the go-ahead from the SEC to integrate a pricing improvement system called Optimark. The system has yet to become popular with dealers. Madoff, a firm that deals in both NYSE and Nasdaq stocks, has sold stakes in Primex to Morgan Stanley Dean Witter & Co. , Merrill Lynch & Co. Inc. and Goldman Sachs Group Inc. . The Primex trading system is based on the so-called auction market model. An auction market brings together buyers and sellers of stocks in one central location, like the NYSE trading floor. In a dealer market, as Nasdaq has traditionally been, stock dealers, known as market makers, mostly negotiate prices for trades over the phone. Designed as a pricing-improvement system, Primex collects orders and electronically sifts through them to produce a better price for trades within the so-called best bid and offer, the official spread maintained on stock orders. The system allows investors with large orders to anonymously interact with the other orders. Another advantage to the Primex system is that it lends itself to easily trade NYSE or other traditional exchange-listed stocks, as is done on Nasdaq's so-called third market. A NASD spokesman confirmed that adoption of the new system would help Nasdaq in boosting its trading of listed stocks -- a lucrative business -- but maintained that Nasdaq planned to adopt the system mostly because of its pricing improvement features. Copyright 2000 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is e