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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: LPS5 who wrote (8183)	5/5/2000 10:43:00 AM
From: TFF	Read Replies (1) \| Respond to of 12617

SEC Approves Plan to Let NYSE Member Firms Trade Off-Exchange SEC Approves Plan to Let NYSE Member Firms Trade Off-Exchange Palm Beach, Florida, May 5 (Bloomberg) -- The Securities and Exchange Commission approved a proposal that lets brokerages such as Merrill Lynch & Co. and Goldman Sachs Group Inc. trade New York Stock Exchange-listed securities off the floor of an exchange. The elimination of NYSE Rule 390, which goes into effect immediately, lets NYSE member firms match customer orders internally or forward them for execution to electronic trading networks, such as Reuters Group Plc's Instinet Corp. ``The commission remains committed to removing anti- competitive obstacles and unleashing even greater, more vigorous competition,'' SEC Chairman Arthur Levitt told the option industry's annual conference in Florida. Levitt announced the federal agency had approved the NYSE proposal, which affects the exchange's 485-odd member firms and the dozen electronic networks that largely have been shut out of trading NYSE stocks. Levitt pushed NYSE Chairman Richard Grasso to eliminate the 200-year-old rule, arguing that it is particularly anti- competitive at a time when both the Big Board and the Nasdaq Stock Market are preparing to become for-profit companies. Grasso had argued that elimination of the rule would promote fragmentation of the securities market, and hurt investors, by allowing trades to be executed off a central exchange. SEC market- regulation director Annette Nazareth acknowledged that trading in NYSE-listed securities could become more fragmented, but said that risk is more than offset by the principle of promoting competition. Earlier this year, the SEC invited public comment on a draft proposal to reduce fragmentation in the securities market. Levitt has questioned whether brokerages' practice of ``internalizing'' trades by matching orders from their own inventory is depriving investors of the best possible price they could get on the open market. Low-cost electronic trading networks, which automatically match buyers and sellers, account for about one-third of all Nasdaq volume but less than 5 percent of NYSE volume. Matthew Andresen, president of Datek Online Holdings Corp.'s Island ECN, has said it isn't clear to what extent business will be drawn away from the NYSE, as many investors are attracted to the liquidity at the Big Board.