BizAnalyst Network

Tuesday, June 05, 2007

Nasdaq's launch of trading system for unregistered securities

SIFMA aims to block Nasdaq's launch of trading system

SIFMA has sent a letter to the Securities and Exchange Commission asking to have the launch of Nasdaq's new system for trading in unregistered stocks blocked. The powerful lobbying group says the system, called Portal, may dissuade some brokers from trading in unlisted firms.
Top Wall Street lobby group moves to block Nasdaq

Luke Jeffs
01 Jun 2007

A powerful lobby group representing Nasdaq’s top clients has moved to block a plan by the US equity exchange to launch a new system for trading in private companies.

The Securities Industry and Financial Markets Association, which represents Wall Street’s top institutions, has sent a letter to the Securities and Exchange Commission asking the US regulator to block Nasdaq’s proposed system for trading in unregistered stocks. The system is called Portal.

SIFMA has claimed the Nasdaq system, which plans to display quotes for unlisted shares after its launch in the third quarter, may discourage brokers from trading in unlisted companies.
The Association has said there are number of areas, such as trade reporting and the nature of subscriber agreements with Portal participants, that need to be clarified.

Robert Greifeld, the chief executive of Nasdaq, announced his proposal to upgrade its system for trading in privately held companies at a SIFMA conference in New York last month.

John Jacobs, executive vice-president and chief marketing officer at Nasdaq, said: “Portal is an open system which can be used by any firm so there will be no need for banks to set up their own proprietary systems.”

The exchange has 50 participants lined up to use the new system.

According to Nasdaq, $162bn (€120.5bn) was raised through private placements last year compared with $154bn from public offerings on the New York Stock Exchange, American Stock Exchange and Nasdaq combined.

Goldman Sachs launched a rival system last month, called Goldman Sachs Tradable Unregistered Equity market. GSTrUE can be used for deals which have been led by the bank.
Deutsche Bank analysts said in a report: “We view Goldman’s development of its own private offerings market as both a positive and negative for Nasdaq. The obvious negative is competition from a very smart and well capitalised competitor. The positive, in our view, is validation that the market does offer strong potential.”

The SEC allows stock to be sold to qualified US institutional buyers, without conforming to the registration and disclosure requirements for fully marketed public offerings.

SIFMA was formed last year when the Securities Industry Association and the Bond Market Association merged.

144a, unregistered stock, dark pools, private trading systems, NASDAQ, portal

Labels: 144a, dark pools, NASDAQ, portal, private trading systems, unregistered stock

Monday, March 12, 2007

NYSE: Electronic Trading on the Front Lines

SEC asks if NYSE's electronic-trading push played role in sell-off
The Securities and Exchange Commission wants to know if the NYSE's push into electronic trading may have played a role in Tuesday's market plunge. In November, the NYSE said it would cut costs by closing one of its five trading rooms. Now regulators are asking if that made it tougher for the NYSE to handle Tuesday's trading surge.
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Computer problem may have exacerbated massive fall on Wall Street
In the midst of what was already a rough day on Wall Street, the Dow Jones industrial average suddenly plummeted 200 points within seconds -- one of the fastest falls in the history of the market. Now it appears that the decline may have been the result of a glitch in a Dow Jones computer system.
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Rosenblatt says automation may make NYSE less effective
Richard Rosenblatt, a member of the NYSE since 1979 and chairman of Rosenblatt Securities, issued a warning about the automation of the exchange. "The benchmark is whether automation makes the process more efficient but I suspect NYSE and the Securities and Exchange Commission have gone too far with the assumption that transparency equals liquidity," Rosenblatt said.
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NYSE, NASDAQ, global markets, equity markets, electronic trading, automation, technology

Labels: automation, electronic trading, equity markets, global markets, NASDAQ, NYSE, technology

Friday, March 09, 2007

Man vs. machine: Algorithmic trading pressures locals

Man vs. machine: Algorithmic trading pressures locals

Expensive machines running high-speed and complex algorithms are squeezing out the small futures traders known as "locals." Locals are fighting back with automated trading systems of their own, but market watchers worry that the locals, who provided much needed liquidity to markets, won't be able to compete.
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Little guys suffer as Wall Street enters machine era

The end of an era is approaching on Wall Street, where the number of humans who work the trading floors is dwindling. And although NYSE CEO John Thain said that there would always be a need for specialists on the exchange, no one expects to see a return to the teeming pits of yesterday. And perhaps the people most likely to be hurt by the change are the small merchants in Wall Street. "Machines and computers don't eat and drink," one bar owner said.
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NYSE, AMEX, NASDAQ, NYMEX, local markets, local business, electronic trading

Labels: AMEX, electronic trading, local business, local markets, NASDAQ, NYMEX, NYSE