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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Jazz102 who wrote (1385)	5/27/1999 6:44:00 PM
From: JC Reddy	Respond to of 10027

SEC Accepting Comment on Electronic Stock-Option Exchange Plan Washington, May 26 (Bloomberg) -- The Securities and Exchange Commission is seeking comment on an electronic stock- options exchange that ETrade Group Inc. and a group of broker- dealers plan to start in March. The International Securities Exchange, if approved by the SEC after the 45-day comment period, would become the first new registered U.S. securities exchange since the Chicago Board Options Exchange was formed in 1973. Founded in 1997 by former ETrade Chairman William A. Porter, the electronic exchange hopes to begin trading options at the end of the first quarter of 2000. Funded with an $80 million investment by a broker-dealer group called Adirondack Trading Partners LLC, the ISE plans to compete with the four major options exchanges -- the American Stock Exchange, Chicago Board Options Exchange, Pacific Exchange and the Philadelphia Stock Exchange -- by slashing the cost of trading. Unlike floor-based exchanges where a crowd of traders bid for the right to fill customer orders, the ISE auction will take place on computer screens that will permit faster trades and with none of the bricks-and-mortar costs associated with the other options exchanges, ISE's backers said. The traditional exchanges -- which have been exploring combinations as a result of pressure from investors and brokerages to lower trading costs -- say they offer benefits an electronic exchange can't. For example, trading is more active on floors, resulting in higher selling prices and lower buying prices for investors, they say. ISE Chief Executive David Krell said earlier this year the exchange has discussed its proposed operation with the SEC over the past year. Gary Katz, senior vice president for ISE's business development, said he expects SEC approval of ISE's registration later this year. Linking Exchanges Meanwhile, the SEC is developing a plan to link the four options exchanges electronically to heighten competition, agency officials have said. SEC Chairman Arthur Levitt has urged a national system for order execution to make sure options customers get the best prices. Options confer the right to buy or sell a specific security, such as a stock or bond, for a fixed price during a certain period. They let investors control shares for a fraction of the actual price. Adirondack, which paid the ISE about $30.5 million for 10 primary market maker memberships and most of the 50 regular market maker memberships, includes ETrade, Ameritrade Holding Corp., Scottsdale Securities Inc., and Nasdaq trading firms Herzog Heine Geduld Inc. and Knight/Trimark Group Inc.* The ISE would not say which other firms are part of Adirondack. Katz said ISE's systems are being tested in Stockholm, Sweden, where strategic partner OM Technology is based. OM Technology is a unit of OM Gruppen AB that specializes in products for securities exchanges. ISE announced a $1.7 million net loss for the first 10 months of 1998 and listed assets of $9.1 million through Oct. 31.