|
PureBytes Links
Trading Reference Links
|
Top Financial News Thu, 27 May 1999, 5:37pm EDT
NASD Board Proposes Evening-Hours Trading for
Stocks in Nasdaq 100 Index
By Neil Roland
NASD Board Moves Toward Evening Nasdaq Trading Hours (Update2) (Adds
Zarb comment on possible September start)
Washington, May 27 (Bloomberg) -- The National Association of
Securities Dealers moved toward extending Nasdaq Stock Market trading
into the night, to meet competition from electronic networks and let
individual investors trade securities after work.
The NASD board approved a proposal calling on its staff to proceed
with preparations to open trading from 5:30 p.m. to 9 p.m. or 10 p.m.
New York time for stocks in the Nasdaq 100 Index -- which includes the
biggest Nasdaq stocks. The Nasdaq market now is open for regular trading
from 9:30 a.m. to 4 p.m.
The NASD didn't set a firm timetable, saying ``a full, responsible
and coordinated effort will take some time.'' September ``is a viable
period'' for later trading, ``but we're not being driven by that,'' NASD
Chairman Frank Zarb said.
If rival private electronic trading networks start providing late
trading, though, Nasdaq ``will expedite its implementation plans,'' the
NASD said. ``In other words, if a portion of the industry acts to
pre-empt an orderly transition, then the Nasdaq Stock Market is prepared
to move quickly,'' the NASD said.
The NASD and New York Stock Exchange have been exploring the
prospects of evening trading as electronic networks such as Eclipse
Trading Inc. and Wit Capital Corp. have said they plan to start offering
late stock trading to individual investors in a few months. Nasdaq, the
second largest U.S. stock market, has been losing business to
fast-growing private systems.
NYSE Chairman Richard Grasso today said he is concerned that evening
trading volumes may be light, and may not provide fair prices for
investors. The NYSE's decision, though, ``will be driven by
competitiveness,'' Grasso said.
`Orderly Transition'
The NASD board's proposal calls on the group's staff to talk further
with brokerages and the Securities and Exchange Commission, which
ultimately has to approve any proposal, ``to achieve an orderly
transition.''
The NASD said it wants to further consider the effect of the proposal
on small broker-dealers -- many of whom have complained that they
wouldn't have the staff to handle evening trading -- and to coordinate
technology preparation by all the brokerages involved. Because of
concerns by some brokers, the prospects of late Nasdaq trading aren't
yet certain, said NASD board member Alan Davidson.
``This is a watered-down version,'' said Davidson, president of the
Zeus Securities brokerage in Jericho, New York. ``This may or may not
happen.'' Davidson, a small-business advocate who opposed the proposal,
said, ``It appears there's no support for this among most brokerages or
issuers.''
Investor advocates favored the proposal. If eventually adopted, the
plan ``should help even the playing field for individuals,'' said Ken
Janke, president of the 750,000-member National Association of Investors
Corp. in Madison Heights, Michigan. ``Most investors have a job during
the day, and can't trade or do the research they want, except in the
evening.''
NYSE Concerns
If Nasdaq moves ahead with late trading, it may force the hand of
the New York Stock Exchange, the world's largest stock market. Grasso
this week said the Big Board will be prepared for evening trading in
July. He added, though, that he would prefer to wait until next year,
after issues are resolved involving the Year 2000 computer problem and a
planned conversion to quoting stock prices in dollars and cents, instead
of fractions.
SEC Chairman Arthur Levitt has said he won't stand in the way of
either market's effort to begin evening trading, though he too would
prefer that they wait until next year.
One equity owner of Eclipse, New York broker-dealer Bernard L.
Madoff, said Nasdaq should go slow in moving toward evening trading.
``There's a big different between a primary market like Nasdaq
extending hours and a private system doing so,'' said Madoff, who heads
the Securities Industry Association's trading committee. ``It forces all
firms to do it, and there are many unresolved issues.''
Among the issues that need to be addressed, Madoff said, are how
small brokerages would staff evening trading, how trades would be
processed in a timely fashion after hours, and how closing prices and
news announcements would be handled.
|