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To: Arcane Lore who wrote (8166)	5/4/2000 2:22:00 PM
From: TFF	Respond to of 12617

Well that confirms what we already know. MM's hold limit orders(inventory) in hand until they can profitably execute them in house and pocket the mark up. I can't imagine anyone wanting to use a discount firm that sells order flow to a MM for execution after the new SuperSOES is in place(except orders of 10,000 shares or greater of course) Why would anyone want the risk of having their limit orders held up?

To: Arcane Lore who wrote (8166)	5/4/2000 2:35:00 PM
From: TFF	Respond to of 12617

Brokerages Fail to Promptly Display Orders, SEC Report Says Washington, May 4 (Bloomberg) Many brokerages fail topromptly display customer orders that could improve the prevailing stock price, suggesting investors may not be getting immediate access to many of the best possible prices, a Securities and Exchange Commission report found. The report, by the SEC's inspections staff, also found these practices often go undetected and unpunished because of lax oversight by stock and options markets. Securities firms and the exchanges both need to increase automation of procedures involving ``limit orders,'' which are placed by customers at specified prices rather than to trade at the market price, the 26-page report said. Many dealers on the Nasdaq Stock Market handle all limit orders manually, the report said. The report found that four large dealers regularly violated SEC rules on limit-order display, including one firm that mishandled 92 percent of the orders sampled by inspectors. The three other firms improperly displayed between 26.5 percent and 58 percent of the orders reviewed, it said. ``This strongly suggests a pattern of neglect, serious neglect, among some market participants (in) surveillance and compliance efforts,'' SEC Chairman Arthur Levitt said. He called on brokerages and exchanges ``to redouble efforts'' to improve procedures. Some exchanges do no monitoring at all of brokerages' limit- order display, relying only on customer complaints, the report said. At one regional stock exchange, one out of six limit orders wasn't being properly displayed, it said. Continued violations of limit-order rules might be referred for investigation to the SEC's enforcement division, the report said. The SEC's economic-analysis unit is conducting a broader study of limit order display. Analysis Office The report, which also was written by the SEC's economic analysis office, was based on March and April inspections of regional and national stock markets, options exchanges and dealers on Nasdaq. It didn't identify any of the offending firms or exchanges, quantify the extent of the violations, or attempt to estimate their financial impact on investors. Limit orders account for two-thirds of all orders placed on the New York Stock Exchange and Nasdaq. These investor orders, which interact with orders placed by dealers and institutions, can equalize access between dealers and investors, the report noted. ``But in order to level the playing field, the dealers must actually display the limit orders they receive,'' the report said. Dealers and specialists have 30 seconds to display limit orders that improve on the market price. If they don't display them, they are supposed to either execute the orders or refer them to another market for display. The most typical brokerage violations found were failure to display orders within 30 seconds, to post the proper order size, and to properly transfer the order to another exchange, the report said. Emerging Evidence Levitt first highlighted the emerging evidence in a March speech. ``I am deeply troubled by this apparent disregard for customer orders and systemic competition,'' the SEC chairman said at the time. The violations appear to be ``very extensive,'' he said, though not resulting from ``venality.'' Levitt also convened a roundtable of securities industry executives today to discuss ways the industry might pool many of the best limit orders from different U.S. markets into a central display. Now, the different market venues must display only one best buy and one best sell order for each stock, rather than a ranked list of the 10 or 20 best. Levitt said he wants a voluntary consolidation of the best orders from sites such as the New York Stock Exchange, the Reuters Group Plc's Instinet Corp. trading network and the Knight/Trimark Group Inc. brokerage. Many of the brokerages and exchange participants expressed support for Levitt's goal of increased visibility of limit orders, and said they'd be willing to open their own limit-order books. Some said, though, that institutional investors have shown a reluctance to open their order books. ``We somehow have to figure out how to deal with this inequity,'' said Bernard L. Madoff, a New York broker-dealer who also heads the Securities Industry Association's trading committee. Other brokers warned that expanding limit-order display could have unintended effects on market volume and volatility. Both the NYSE and Nasdaq have proposed ways to broaden public display of pending limit orders, which have been an important vehicle for promoting price competition in the last few years. Since they were begun on Nasdaq in 1997, these orders have narrowed trading spreads -- the difference between the buying and selling prices -- by about 30 percent. ¸ Copyright 2000, Bloomberg L.P. All Rights Reserved.

To: Arcane Lore who wrote (8166)	5/4/2000 2:35:00 PM
From: TFF	Respond to of 12617

Brokerages Fail to Promptly Display Orders, SEC Report Says Washington, May 4 (Bloomberg) Many brokerages fail topromptly display customer orders that could improve the prevailing stock price, suggesting investors may not be getting immediate access to many of the best possible prices, a Securities and Exchange Commission report found. The report, by the SEC's inspections staff, also found these practices often go undetected and unpunished because of lax oversight by stock and options markets. Securities firms and the exchanges both need to increase automation of procedures involving ``limit orders,'' which are placed by customers at specified prices rather than to trade at the market price, the 26-page report said. Many dealers on the Nasdaq Stock Market handle all limit orders manually, the report said. The report found that four large dealers regularly violated SEC rules on limit-order display, including one firm that mishandled 92 percent of the orders sampled by inspectors. The three other firms improperly displayed between 26.5 percent and 58 percent of the orders reviewed, it said. ``This strongly suggests a pattern of neglect, serious neglect, among some market participants (in) surveillance and compliance efforts,'' SEC Chairman Arthur Levitt said. He called on brokerages and exchanges ``to redouble efforts'' to improve procedures. Some exchanges do no monitoring at all of brokerages' limit- order display, relying only on customer complaints, the report said. At one regional stock exchange, one out of six limit orders wasn't being properly displayed, it said. Continued violations of limit-order rules might be referred for investigation to the SEC's enforcement division, the report said. The SEC's economic-analysis unit is conducting a broader study of limit order display. Analysis Office The report, which also was written by the SEC's economic analysis office, was based on March and April inspections of regional and national stock markets, options exchanges and dealers on Nasdaq. It didn't identify any of the offending firms or exchanges, quantify the extent of the violations, or attempt to estimate their financial impact on investors. Limit orders account for two-thirds of all orders placed on the New York Stock Exchange and Nasdaq. These investor orders, which interact with orders placed by dealers and institutions, can equalize access between dealers and investors, the report noted. ``But in order to level the playing field, the dealers must actually display the limit orders they receive,'' the report said. Dealers and specialists have 30 seconds to display limit orders that improve on the market price. If they don't display them, they are supposed to either execute the orders or refer them to another market for display. The most typical brokerage violations found were failure to display orders within 30 seconds, to post the proper order size, and to properly transfer the order to another exchange, the report said. Emerging Evidence Levitt first highlighted the emerging evidence in a March speech. ``I am deeply troubled by this apparent disregard for customer orders and systemic competition,'' the SEC chairman said at the time. The violations appear to be ``very extensive,'' he said, though not resulting from ``venality.'' Levitt also convened a roundtable of securities industry executives today to discuss ways the industry might pool many of the best limit orders from different U.S. markets into a central display. Now, the different market venues must display only one best buy and one best sell order for each stock, rather than a ranked list of the 10 or 20 best. Levitt said he wants a voluntary consolidation of the best orders from sites such as the New York Stock Exchange, the Reuters Group Plc's Instinet Corp. trading network and the Knight/Trimark Group Inc. brokerage. Many of the brokerages and exchange participants expressed support for Levitt's goal of increased visibility of limit orders, and said they'd be willing to open their own limit-order books. Some said, though, that institutional investors have shown a reluctance to open their order books. ``We somehow have to figure out how to deal with this inequity,'' said Bernard L. Madoff, a New York broker-dealer who also heads the Securities Industry Association's trading committee. Other brokers warned that expanding limit-order display could have unintended effects on market volume and volatility. Both the NYSE and Nasdaq have proposed ways to broaden public display of pending limit orders, which have been an important vehicle for promoting price competition in the last few years. Since they were begun on Nasdaq in 1997, these orders have narrowed trading spreads -- the difference between the buying and selling prices -- by about 30 percent. ¸ Copyright 2000, Bloomberg L.P. All Rights Reserved.

To: Arcane Lore who wrote (8166)	5/4/2000 2:35:00 PM
From: TFF	Respond to of 12617

Brokerages Fail to Promptly Display Orders, SEC Report Says Washington, May 4 (Bloomberg) Many brokerages fail topromptly display customer orders that could improve the prevailing stock price, suggesting investors may not be getting immediate access to many of the best possible prices, a Securities and Exchange Commission report found. The report, by the SEC's inspections staff, also found these practices often go undetected and unpunished because of lax oversight by stock and options markets. Securities firms and the exchanges both need to increase automation of procedures involving ``limit orders,'' which are placed by customers at specified prices rather than to trade at the market price, the 26-page report said. Many dealers on the Nasdaq Stock Market handle all limit orders manually, the report said. The report found that four large dealers regularly violated SEC rules on limit-order display, including one firm that mishandled 92 percent of the orders sampled by inspectors. The three other firms improperly displayed between 26.5 percent and 58 percent of the orders reviewed, it said. ``This strongly suggests a pattern of neglect, serious neglect, among some market participants (in) surveillance and compliance efforts,'' SEC Chairman Arthur Levitt said. He called on brokerages and exchanges ``to redouble efforts'' to improve procedures. Some exchanges do no monitoring at all of brokerages' limit- order display, relying only on customer complaints, the report said. At one regional stock exchange, one out of six limit orders wasn't being properly displayed, it said. Continued violations of limit-order rules might be referred for investigation to the SEC's enforcement division, the report said. The SEC's economic-analysis unit is conducting a broader study of limit order display. Analysis Office The report, which also was written by the SEC's economic analysis office, was based on March and April inspections of regional and national stock markets, options exchanges and dealers on Nasdaq. It didn't identify any of the offending firms or exchanges, quantify the extent of the violations, or attempt to estimate their financial impact on investors. Limit orders account for two-thirds of all orders placed on the New York Stock Exchange and Nasdaq. These investor orders, which interact with orders placed by dealers and institutions, can equalize access between dealers and investors, the report noted. ``But in order to level the playing field, the dealers must actually display the limit orders they receive,'' the report said. Dealers and specialists have 30 seconds to display limit orders that improve on the market price. If they don't display them, they are supposed to either execute the orders or refer them to another market for display. The most typical brokerage violations found were failure to display orders within 30 seconds, to post the proper order size, and to properly transfer the order to another exchange, the report said. Emerging Evidence Levitt first highlighted the emerging evidence in a March speech. ``I am deeply troubled by this apparent disregard for customer orders and systemic competition,'' the SEC chairman said at the time. The violations appear to be ``very extensive,'' he said, though not resulting from ``venality.'' Levitt also convened a roundtable of securities industry executives today to discuss ways the industry might pool many of the best limit orders from different U.S. markets into a central display. Now, the different market venues must display only one best buy and one best sell order for each stock, rather than a ranked list of the 10 or 20 best. Levitt said he wants a voluntary consolidation of the best orders from sites such as the New York Stock Exchange, the Reuters Group Plc's Instinet Corp. trading network and the Knight/Trimark Group Inc. brokerage. Many of the brokerages and exchange participants expressed support for Levitt's goal of increased visibility of limit orders, and said they'd be willing to open their own limit-order books. Some said, though, that institutional investors have shown a reluctance to open their order books. ``We somehow have to figure out how to deal with this inequity,'' said Bernard L. Madoff, a New York broker-dealer who also heads the Securities Industry Association's trading committee. Other brokers warned that expanding limit-order display could have unintended effects on market volume and volatility. Both the NYSE and Nasdaq have proposed ways to broaden public display of pending limit orders, which have been an important vehicle for promoting price competition in the last few years. Since they were begun on Nasdaq in 1997, these orders have narrowed trading spreads -- the difference between the buying and selling prices -- by about 30 percent. ¸ Copyright 2000, Bloomberg L.P. All Rights Reserved.

To: Arcane Lore who wrote (8166)	5/4/2000 2:36:00 PM
From: TFF	Read Replies (1) \| Respond to of 12617

Brokerages Fail to Promptly Display Orders, SEC Report Says Washington, May 4 (Bloomberg) Many brokerages fail topromptly display customer orders that could improve the prevailing stock price, suggesting investors may not be getting immediate access to many of the best possible prices, a Securities and Exchange Commission report found. The report, by the SEC's inspections staff, also found these practices often go undetected and unpunished because of lax oversight by stock and options markets. Securities firms and the exchanges both need to increase automation of procedures involving ``limit orders,'' which are placed by customers at specified prices rather than to trade at the market price, the 26-page report said. Many dealers on the Nasdaq Stock Market handle all limit orders manually, the report said. The report found that four large dealers regularly violated SEC rules on limit-order display, including one firm that mishandled 92 percent of the orders sampled by inspectors. The three other firms improperly displayed between 26.5 percent and 58 percent of the orders reviewed, it said. ``This strongly suggests a pattern of neglect, serious neglect, among some market participants (in) surveillance and compliance efforts,'' SEC Chairman Arthur Levitt said. He called on brokerages and exchanges ``to redouble efforts'' to improve procedures. Some exchanges do no monitoring at all of brokerages' limit- order display, relying only on customer complaints, the report said. At one regional stock exchange, one out of six limit orders wasn't being properly displayed, it said. Continued violations of limit-order rules might be referred for investigation to the SEC's enforcement division, the report said. The SEC's economic-analysis unit is conducting a broader study of limit order display. Analysis Office The report, which also was written by the SEC's economic analysis office, was based on March and April inspections of regional and national stock markets, options exchanges and dealers on Nasdaq. It didn't identify any of the offending firms or exchanges, quantify the extent of the violations, or attempt to estimate their financial impact on investors. Limit orders account for two-thirds of all orders placed on the New York Stock Exchange and Nasdaq. These investor orders, which interact with orders placed by dealers and institutions, can equalize access between dealers and investors, the report noted. ``But in order to level the playing field, the dealers must actually display the limit orders they receive,'' the report said. Dealers and specialists have 30 seconds to display limit orders that improve on the market price. If they don't display them, they are supposed to either execute the orders or refer them to another market for display. The most typical brokerage violations found were failure to display orders within 30 seconds, to post the proper order size, and to properly transfer the order to another exchange, the report said. Emerging Evidence Levitt first highlighted the emerging evidence in a March speech. ``I am deeply troubled by this apparent disregard for customer orders and systemic competition,'' the SEC chairman said at the time. The violations appear to be ``very extensive,'' he said, though not resulting from ``venality.'' Levitt also convened a roundtable of securities industry executives today to discuss ways the industry might pool many of the best limit orders from different U.S. markets into a central display. Now, the different market venues must display only one best buy and one best sell order for each stock, rather than a ranked list of the 10 or 20 best. Levitt said he wants a voluntary consolidation of the best orders from sites such as the New York Stock Exchange, the Reuters Group Plc's Instinet Corp. trading network and the Knight/Trimark Group Inc. brokerage. Many of the brokerages and exchange participants expressed support for Levitt's goal of increased visibility of limit orders, and said they'd be willing to open their own limit-order books. Some said, though, that institutional investors have shown a reluctance to open their order books. ``We somehow have to figure out how to deal with this inequity,'' said Bernard L. Madoff, a New York broker-dealer who also heads the Securities Industry Association's trading committee. Other brokers warned that expanding limit-order display could have unintended effects on market volume and volatility. Both the NYSE and Nasdaq have proposed ways to broaden public display of pending limit orders, which have been an important vehicle for promoting price competition in the last few years. Since they were begun on Nasdaq in 1997, these orders have narrowed trading spreads -- the difference between the buying and selling prices -- by about 30 percent. ¸ Copyright 2000, Bloomberg L.P. All Rights Reserved.