| BUSINESSWEEK ONLINE : OCTOBER 11, 1999 ISSUE | ||||||||
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| FINANCE
The Players and Their Positions Wrenching change is in store for both old hands and new entrants to the trading game NYSE The senior U.S. market has shielded itself through Rule 390, which prohibits members from trading stocks away from the NYSE floor. But thanks to strong pressures from the SEC and competitors to reform itself, NYSE Chairman Richard Grasso is moving to issue its shares next year to public investors. NASDAQ Nasdaq market makers have lost 30% of their trading volume to electronic communication networks (ECNs). To recoup, Nasdaq CEO Frank Zarb wants to enlist 5,000 small broker-members to convert to a for-profit exchange via a private stock placement. Eventually, Nasdaq may do an initial public offering. ECNs ECNs are aggressively grabbing order flow Nasdaq. Island ECN and Archipelago are picking up big business from online brokers and aspire to become exchanges. Some are backed by big Wall Street firms. One problem: ECNs are matching buyers and sellers internally, without exposure to the broader market. HOW IT MAY SHAKE OUT Electronic links will tie players together: A stock order placed in the NYSE would be exposed to Nasdaq and ECN traders. But markets could opt out of linkages if they were able to match orders internally: Some ECNs could handle fast retail executions, while others could accept big institutional orders that need special attention. Experts expect the NYSE, Nasdaq, and two to four ECNs-turned-exchanges to thrive. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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