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

To: Morpher who wrote (7018)	4/21/1999 7:37:00 AM
From: wily	Read Replies (1) \| Respond to of 12617

*Zarb pushed the proposal as a way to improve Nasdaq's ability to compete with the New York Stock Exchange and electronic trading networks like Reuters Group Plc's Instinet Corp.* Wouldn't this make Nasdaq the dominant exchange -- even over NYSE? And also put other ECN's out of business. (Not to mention scuttling Island's plan to be an exchange). I think it also would reduce trading commissions for the doe firms since it would be a snap to get your fill done on a single ticket. Would also simplify software. Of course, commission structures would change to a more size-oriented type. I didn't realize that it was the SEC that shot it down last time -- I had thought it was an internal Nasdaq thing. Thanks for the articles. wily

To: Morpher who wrote (7018)	4/26/1999 12:38:00 AM
From: Dan Duchardt	Read Replies (2) \| Respond to of 12617

http://www.bloomberg.com/news2.cgi?T=scrnews.ht&s=44677889 Washington, April 20 (Bloomberg) -- The U.S. Securities and Exchange Commission has quietly revived a controversial National Association of Securities Dealers proposal that would create a central market for customer orders at specified prices. .... The SEC issued a terse statement about the plan yesterday, buried in a notice about another NASD proposal: ''The comment period on Nasdaq's Limit Order Book Proposal has been reopened,'' the SEC said in its daily digest of announcements. IMHO the flavor of the Bloomberg article is misleading and unfair to the SEC. I just happened to have spent a good portion of my afternoon reading the "other NASD proposal", which is their latest attempt at creating their own limit book. More importantly, it is an attempt to eliminate the crucial "S" (small) in SOES by allowing the big guys easier access to the automated execution systems. I also read the original limit book proposal, which the SEC has supposedly "revived", and the "Agency Quote" proposal. No wonder the institutions and Mutual Funds favored the original limit book proposal, and will probably favor this one. You think it's hard to get executed now? Just imagine what it will be like when you are competing with the big guys popping off 9,900 shares at a crack, with no waiting period between orders, on the only automated system you have for your trading (999,999 share limit in the original proposal). After obscuring the facts, the Bloomberg article finally made the point by quoting the SEC Because these proposals are largely alternatives to each other, market participants should have the chance to formally comment on the limit-order book proposal in light of the SOES/SelectNet and agency quote proposals,'' the SEC wrote in its solicitation of comments. In my view, rather than being guilty of some surreptitious attempt to revive a controversial proposal, the SEC has taken an enlightened position. The NASD has done the reviving. The new proposal is very similar to the original one, especially all the sections talking about the motivation for the proposal. Noting the interrelationship among these proposals and calling for comments that take an integrated look at the issues instead of restricting comments to the piecemeal proposals coming out of the NASD is a step in the right direction. NASD has a point when they say SOES and SelectNet are not working the way they were intended. They blame (with some justification) the requirements imposed on them to equitably represent client orders. Most of us know that they did their own part to make SOES an ineffective system by getting rid of the tier size quote requirement, and MMs have made SNET useless by incessantly backing away from legitimate preference orders, knowing it is virtually impossible to prove that they do it. Now, even in the text of its proposal NASD complains about ECN users disrupting the market by working the ECN rules to their advantage, as if their MM members never conceived of doing such a thing with their many advantages. There is way too much stuff in these proposals to cover in this forum, and I doubt I have the ability to anticipate the consequences of all the little advantages they are proposing they be allowed to hold on to. One thing I'm sure of is that the examples they site in the proposal obscure the consequences of the changes to the small investor. I don't know anything about the ETA others on this thread have mentioned. I hope they are truly looking out for the small investor in general, and not simply protecting their business interests by crying foul about NASD competition. Somehow, I'm not too optimistic, but I think I'll wander over to their site and see what they have to say.