Securities Industry News articles from January 2004

Securities Industry News archives from January 2004

Schwab: Trading Under New Rules.
January 12, 2004... After three difficult years and a robust recovery, U.S. capital markets may find their next big challenge in regulatory reforms that could reshape equity trading, according to Larry Leibowitz, EVP of Schwab Capital Markets. "I don't know...

aPhiladelphia Story: Exchange's price cuts highlight BOX anticipation.
January 12, 2004... The Philadelphia Stock Exchange's surprise year-end spike to the top spot among U.S. options markets may signal those venues have little pricing power left, if they want to compete with the low-cost Boston Options Exchange. "We are ready...

Paper Pileup for Europe's Funds.
January 12, 2004... While the European investment funds industry is slowly awakening to late trading and other indiscretions that have roiled its U.S. counterparts, a key problem remains: it is drowning in paper. And the situation only promises to worsen in the...

A New Year, A New SIN.(Editorial)
January 12, 2004... With this issue, we proudly unveil the New Securities Industry News-the first major redesign of the newspaper in about six years. This dramatic new look is the culmination of months of work that began, fittingly, with our readers. Last...

Building an Ideal Post-ITS World: Trade in the Trade-Through Rule.
January 12, 2004... There's nothing like juicy corporate governance and market regulation scandals to shake up a 25-year-old convention. Although the Securities and Exchange Commission has been discussing the need for intermarket trading reforms for several years,...

Management Rules Tossed As Euronext CEO Stays.
January 12, 2004... Give Euronext some credit. In a year in which the New York Stock Exchange was forced to revamp its management structure and City of London bigwigs continually grumbled over the timidity of the London Stock Exchange's senior management, the...

Wait Continues for Instinet-Island Combination.
January 12, 2004... Although Instinet Group began touting its soon-to-be-combined mega-ATS months ago, it has moved slowly on the project, making Inet's move to SuperMontage on a previously announced January schedule doubtful. Instead, Instinet is ratcheting...

Crisis Expert Ketchum Gets Toughest Job at Big Board.
January 12, 2004... By choosing Richard Ketchum as its first chief regulatory officer, the New York Stock Exchange has chosen a top lawyer familiar with crises to help stir the world's largest market out of its dire regulatory straits. Ketchum is a former...

Patent Suits eSpeed.
January 12, 2004... Nynex settlement ups Wagner tally to $45m With the addition of last month's $8 million settlement with the New York Mercantile Exchange regarding its Wagner patent, eSpeed has racked up a total of $48 million in scheduled payments through...

Wexford Clearing Sells GIS Unit.
January 12, 2004... As part of the fallout from the merger of the brokerage arms of Prudential Securities and Wachovia Securities, Prudential's clearing arm, Wexford Clearing, has sold its institutional clearing operations to Refco Securities, officials said last...

Fed Endorses Guvvie Clearing Backup.
January 12, 2004... The Federal Reserve Board endorsed last week a task force's recommendation to create a "dormant," contingent, state-chartered clearing bank ready for activation should one of the two banks responsible for settling government securities exit the...

Service Providers Targeted by SEC Plan.
January 12, 2004... Investment companies and investment advisors will have to rework their contractual agreements to ensure their "service providers" are complying with federal securities laws as mandated by the Securities and Exchange Commission's newly adopted...

Buy-Side SRO' Possibility Still Nags Market Players.
January 12, 2004... Of all the ideas contained in the slew of Congressional bills, rule filings and proposals aimed at cleaning up the compliance failures and violations of the investment company industry and their intermediaries, plans to create a separate,...

Back Office Key to Hedge Fund Scrutiny.
January 12, 2004... Hedge funds may come to view 2004 as the year their unregulated status slipped away, bit by bit if not all at once. A precedent-setting regulatory enforcement action in December extended the reach of the 1940 Investment Advisers Act (the...

Market Balks at ICI's Plan to Ban Soft Dollars.
January 12, 2004... Analysts and industry players predict that the Investment Company Institute's proposal to ban soft dollars to pay for buy-side trading systems and third-party research will not be accepted by the Securities and Exchange Commission. Such a...

Does Eurex Need CFTC OK for U.S. Link?(Commodity Futures Trading Commission)
January 12, 2004... The issue of whether Eurex needs approval from the Commodity Futures Trading Commission to establish a cross-Atlantic clearing link between Chicago's Clearing Corp. and Frankfurt-based Eurex Clearing has become a key factor in its bid to launch...

Buy-Side Options Challenge the Street.
January 12, 2004... After reaping hefty profits in 2003, thanks to drastic cost cutting and a global market recovery, brokerages are now bracing for new challenges from a suddenly demanding buy-side, Deloitte & Touche says. "The advantages that securities...

Inflation Shift Could Roil Markets in '04.
January 12, 2004... The first reversal in the inflation trend in 20 years might be the single most important development U.S. financial markets will face in 2004, according to Barclays Capital. The momentous shift would prompt the Federal Reserve to raise...

After Cost-Cutting, Citigroup Plans to Spend on IT in '04.(Interview)
January 12, 2004... Like many of its counterparts in the securities industry, Citigroup has held back on IT expenditures over the last few years. However, in what represents a significant strategic shift, the firm plans to increase spending on corporate investment...

Buy-Side Newcomers Pin Growth Hopes on Technology.(Black River Asset Management )
January 12, 2004... While startups Altair Investments and Black River Asset Management are taking very different approaches to technology, their executives agree on one thing: There's never been a better time to launch an investment business. Despite the...

New Data Transformation Model Gains Momentum.
January 12, 2004... Think of a bicycle wheel. You've got the rim, you've got spokes and you have a hub at the center that all the spokes are attached to. Now, imagine there was no hub and that the spokes went straight across. And that it wasn't enough to just...

More Instinet Cutbacks.(Brief Article)
January 12, 2004... Instinet Group is taking a $60-million charge in the fourth quarter to cover costs related to 185 new layoffs and office consolidation, as the parent of a major ECN and value-added broker struggles to slash fees and gain market share. On...

Nasdaq Opening OK'd.(Brief Article)
January 12, 2004... The Securities and Exchange Commission last week approved Nasdaq's plans to establish an official opening price. The price will be determined by the first execution within SuperMontage at 9:30 a.m. (EST). For stocks where there is no match at...

Japan's Clearing Agencies Join Forces.(Japan Government Bond Clearing Corp.)
January 12, 2004... Japan's two clearing agencies have signed a memorandum of understanding on interoperability, evidencing a broader consolidation of the complex clearing and settlement infrastructure in Japan. The Japan Securities Clearing Corp. (JSCC), the...

On The Record.
January 12, 2004... "If you take away the NYSE, New York could well lose its centrality as the financial capital of the world. One could not even think of a greater blow to New York's economy than the demise-or even the diminution-of the NYSE." -Senator Charles...

The New Nasdaq Challenge.
January 19, 2004... While still struggling with competition in its own market, Nasdaq has shifted gears to take on the biggest rival of them all: the New York Stock Exchange. The pioneer of electronic trading announced last week that six NYSE-listed...

Electronic Markets Push for Listed Stocks.
January 19, 2004... Electronic markets want to compete against the New York Stock Exchange and they're not waiting for trade-through reforms to do so. Instead, Nasdaq, ArcaEx and Instinet are all busy pushing out new platforms to trade NYSE stocks and...

BOX Could Reshape Options.
January 19, 2004... The Boston Options Exchange (BOX), a new low-cost platform with an innovative market structure, may well reshape the industry, as it ushers in penny trading in a nickel-moving market and gives legitimacy to internalization. The Securities...

Time Not on Funds' Side.
January 19, 2004... Compared to the securities markets, there has long been something almost quaint about the mutual fund business, even as it grew to a $7 trillion industry in the 80 years since the first fund was created. While securities were often...

Go With the Flow: Options Order Routing.
January 19, 2004... The International Securities Exchange's (ISE) growth since its May 2000 launch and last week's SEC approval of the Boston Options Exchange (BOX) reflect the interest in new mechanisms for options trading. Several specialist firms have scaled...

Academics Find Evidence of Fair-Weather Market Makers.
January 19, 2004... Efficient market theorists have never been enamored with the belief that weather influences share prices and trading decisions (except, of course, when you're discussing tangibles like the effect of extreme weather on agricultural or...

Citigroup Shakes up Trading Operations.
January 19, 2004... In a major reorganization within its equities trading operation, Citigroup's equities department, formerly known as Salomon Smith Barney, is revamping the range of its trading connectivity and bringing it under the control of a single entity,...

Bloomberg Gains SEC's Backing.
January 19, 2004... In a victory for Bloomberg, the Securities and Exchange Commission last week supported the vendor's position regarding New York Stock Exchange restrictions on its ability to present the exchange's LiquidityQuote data. Among other things,...

Merrill Workstation Launch Delayed.
January 19, 2004... Merrill Lynch is pushing back the rollout schedule for its wealth management workstation but is still slated to unveil the offering this year, according to executives involved in the project. Executives at Merrill and Thomson Financial,...

NSCC Plans Response to SMAS Critics.
January 19, 2004... The National Securities Clearing Corp. (NSCC) will submit a response letter to the Securities and Exchange Commission addressing issues raised by vendors opposed to the clearinghouse's planned separately managed account service (SMAS) data hub,...

SEC Shifts Certificate Policy.
January 19, 2004... While physical stockcertificates may be quickly disappearing, they're still giving industry regulators and transfer agents plenty of angst. The Securities and Exchange Commission has just codified a decade-old practice within the stock...

Swift Pursuing Ambitious XML Agenda.(Swift)
January 19, 2004... Anyone who thought that Swift would be on a standards hiatus following last year's migration from ISO 7775 to 15022 had better think again. Swift is embarking on a new methodology for the migration from the first version of ISO 15022, which is...

Looking Outward to Manage Ops Risk.
January 19, 2004... Driven by the forthcoming Basel II Accord, banks are making a push to collect data on their losses in order to better manage their operational risk. In addition to collecting data internally to see where they have suffered losses in the past,...

Guvvie Backup Bank Needs Ops, Assets.
January 19, 2004... Initial work by a new private-sector task force formed to develop a clearing bank as backup to the two banks that settle government securities, will include determining what assets and operations the so-called "NewBank" would need to purchase...

Trading Increasingly Contained in a Box.
January 19, 2004... Program trading on the New York Stock Exchange as a percentage of average daily exchange volume has been growing over the last couple of years, jumping from about 25 percent in early 2002 to 49 percent in mid-December. That surge points to a...

Barclays IT: Keeping Pace With Rapid-Fire Growth.(Interview)
January 19, 2004... Barclays Capital is on a tear as of late-growing revenue about 20 percent a year, expanding its geographic reach, particularly in the United States, and rolling out new products. In an interview with Securities Industry News technology editor...

Rabobank, KBC Eye Merged Back Office.(Brief Article)
January 19, 2004... Dutch bank Rabobank Nederland and Belgian banking and insurance group KBC are in talks to develop a common custody and settlement platform by 2006, bank officials said. The banks are keeping relatively mum about the details of the move,...

BrokerTec Buy Boosts Eurex in U.S.
January 19, 2004... Swiss-German derivatives giant Eurex, which is seeking entry into the U.S. futures market, is acquiring BrokerTec Futures Exchange as part of a complex plan to give U.S. investors a 20-percent stake in its proposed Eurex U.S. unit. Eurex...

Philadelphia Taps HyperFeed for PHLX XL.(Brief Article)
January 19, 2004... The Philadelphia Stock Exchange will be using HyperFeed's ticker plant technology to support its planned PHLX XL, a new electronic options trading system that will enable market makers to electronically deliver streaming quotes. The exchange is...

OnThe Record.
January 19, 2004... "Every mutual fund investor should expect... honest and industrious fiduciaries who sensibly put their money to work for them in our capital markets. Investors also deserve a brokerage and mutual fund industry built on fundamentally fair and...

Spending Spree on IT: After three years of increases, Raymond James comes back for more.
January 26, 2004... Bucking the recent trend of scant IT spending in the securities industry, Raymond James Financial's expenditures have remained consistently up about 5 percent for each of the last three years, and are expected to grow an additional 7 percent in...

Divide and Conquer?
January 26, 2004... Instinet Group, which once hoped to unlock synergies from its acquisition of rival Island, is now betting that splitting its execution and brokerage businesses will lead to profitability. The global brokerage, which is majority-owned by...

Demutualized Down Under.
January 26, 2004... With the Philadelphia Stock Exchange approving a demutualized structure last week, and some market players advocating a similar for-profit plan for the New York Stock Exchange as it continues its well-publicized reorganization, those markets...

Being Lucky, Being Good.(Editorial)
January 26, 2004... Sometimes, as they say, it's better to be lucky than good. Being lucky and good, of course, is optimal. The reason we mention this is that we-and, by extension, our readers-have been the beneficiaries of both good planning and good timing in...

Membership Structures Key To Exchange Order Routing.
January 26, 2004... When he learned he had been chosen for membership in Hollywood's exclusive Friars Club, Groucho Marx's famous response was to send the club a wire: "Please accept my resignation. I don't want to belong to any club that will accept me as a...

Among Top 10 Frauds, Regulators Go Phishing.
January 26, 2004... Investors, sports fans, moviegoers and David Letterman addicts just love the concept of the Top 10 list. It doesn't matter if it's an annual ranking of returns in a given mutual fund or stock category, or a list of the year's best films, or a...

Deal Gives IBM Data Outsourcing Boost.
January 26, 2004... Dresdner Bank's decision to outsource its data management operations to IBM foreshadows the technology powerhouse's entree into the competitive outsourcing arena and a change of focus for Asset Control, which is providing the underlying...

Processing Snafus Hit Italian Market.
January 26, 2004... Computer glitches at Italy's largest technology provider, in part related to the implementation of a new settlement system, caused some delays in the Italian market over much of last week, say local banks. The problems involved trade...

Wireless Services Extend Data Offerings.
January 26, 2004... Initiatives providing real-time data and sophisticated, direct access trading over wireless devices appear to be signaling the arrival, finally, of the next generation of wireless financial services. In February, longtime provider of...

Nasdaq's Turnaround Plan, Vol. 2.
January 26, 2004... Nasdaq, whose market share has been on a steady slide, is moving into phase two of its turnaround plan by slashing fees and souping up SuperMontage, set to welcome a major player, the Inet ATS. SuperMontage 4.0 was introduced last month...

SEC OKs FIX Fees for Nasdaq Members.(Brief Article)
January 26, 2004... The Securities and Exchange Commission has signed off on a proposed rule change filed last August to modify fees to Nasdaq members who use the FIX protocol to trade on Nasdaq and its SuperMontage platform. The market has also filed a...

Link Delay Another Challenge for Eurex.
January 26, 2004... While Eurex's delay in launching the first of its kind cross-Atlantic clearing link between Chicago's Clearing Corp. and subsidiary Eurex Clearing to allow clearing in either entity won't derail its entree in the U.S. market, it could help dull...

NSCC Prepares for Hard Close.(National Securities Clearing Corp.)
January 26, 2004... Rights of accumulation (ROA) and back-end load data can be processed after the proposed 4:00 p.m. (EST) "hard close" of mutual fund orders, according to the National Securities Clearing Corp. NSCC is deciding how to ease issues involved in...

FIX Testing at Bear Stearns Goes Beyond the Message.
January 26, 2004... While the form that industry-wide FIX certification and testing will take remains unclear, some firms are wasting no time pursuing their own tests of the protocol. Bear Stearns' recent deployment of Aegis Software's Exchange Simulator and...

Charting a New Course On the Cusp of a Merger.(acquisition of Bank of Bermuda by Hongkong and Shanghai Banking Corporation)(Interview)
January 26, 2004... HSBC's proposed acquisition of Bank of Bermuda-shareholders will vote on the plan on Feb. 16-would not only advance the world's second-largest banking group's efforts in the wealth management arena, but it would also give it an opportunity to...

Clearstream Expands Fund Platform.
January 26, 2004... In unveiling an upgrade to its Vestima investment fund settlement platform, international depository Clearstream is encouraging the badly needed automation of the EUR4 trillion European industry. But the move could also pose a challenge to...

SEC Approves PHLX's Demutualization.(Philadelphia Stock Exchange Inc.)
January 26, 2004... The Philadelphia Stock Exchange last week received the Securities and Exchange Commission's blessing to demutualize and become a shareholder-owned business, poised to attract financing. The PHLX's 505 seats are converted into 50,500 Class-A...

AMF Sets Sights on Netting.(Asset Management Forum )(Brief Article)
January 26, 2004... The Asset Management Forum plans to make progress at the Bond Market Association's upcoming Feb. 13 annual meeting on proposals by the Fixed-Income Clearing Corp. to better facilitate the netting of sell-side bond trades, AMF Director Ken...

On The Record.(Social Security taxes )(Brief Article)
January 26, 2004... "Younger workers should have the opportunity to build a nest egg by saving part of their Social Security taxes in a personal retirement account. We should make the Social Security system a source of ownership for the American people."...