NEW YORK -- A majority of traders, market makers and other securities professionals said a lack of liquidity poses the greatest potential problem for investors during extended-hours trading sessions, according to a poll conducted by the Security Traders Association.
Almost 54% of the 1,010 respondents cited liquidity as the biggest potential problem in extended-hours trading; 41% said price volatility would be the biggest source of investor concerns.
"STA members have seen the liquidity and price volatility problems caused by low trading volume in past attempts at late trading," said Lee Korins, STA President. "They have no reason to believe these issues have been fully addressed as yet.
"That's a big part of the reason the market professionals are so strongly in favor of a coordinated approach to extended hours. These are the hand-on people who know the market better than anyone."
A total of 777 respondents -- 77% -- said they favor an industry-wide, coordinated approach in launching extended trading hours; only 15% said each exchange or electronic communication network should begin trading after normal market hours when they are ready.
New company gets regulatory approval
NEW YORK -- The Depository Trust & Clearing Corp. -- a new holding company that will integrate The Depository Trust Co. and the National Securities Clearing Corp. --has received regulatory approval to begin operation from the Securities and Exchange Commission and the New York State Banking Board.
The proposed integration also has passed Hart-Scott-Rodino Anti-trust Improvements Act review by the Federal Trade Commission and the Department of Justice.
Both companies will operate as separate subsidiaries of DTCC, although there will be a single board and single management team.
According to DTC and NSCC officials, a formal offering to exchange current DTC and NSCC shares for shares in DTCC is now being sent to the 130 shareholders of the two organizations.
The exchange offer is expected to be completed by Oct. 15.
Under the terms of the exchange offer, DTC stockholders will be offered one share of DTCC common stock for every share of their stock. NSCC shareholders will be offered preferred shares in DTCC in exchange for their stock.
The Depository Trust Co. is the world's largest securities depository, holding nearly $20 trillion in assets for participants and their customers.
The National Securities Clearing Corp. is the leading provider of centralized post-trade comparison, trade guarantee, trade netting, settlement and information services for equities, bonds, unit investment trusts, mutual funds and insurance transactions in the United States.
Nasdaq, MCI create trading system
WASHINGTON -- Nasdaq Stock Market and MCI WorldCom said they have created one of the world's largest extranets, which will provide capacity for trading 4 billion shares a day. The Enterprise Wide Network II can be scaled up to accommodate an 8-million-share day, according to officials for the two companies. Average Nasdaq volume in 1999 is 985 million shares per day; a peak of 1.4 billion shares was reached on April 14.
Montreal Exchange joins GLOBEX Alliance
MONTREAL -- Canada's Montreal Exchange has joined the GLOBEX Alliance, which already includes the Chicago Mercantile Exchange, the ParisBourse SA, the Singapore International Monetary Exchange and the Brazilian Bolsa de Mercadorias & Futures, which joined the alliance Sept. 10.
The Montreal Exchange said it intends to use the same NSC Electronic Trading System developed by ParisBourse and used by all of the GLOBEX Alliance partners.
Under the GLOBEX Alliance, members of each exchange will have direct access to all the products of all the markets inside the alliance. They will also receive trading privileges for the electronically traded products of the other exchanges and cross-margining of positions to reduce the capital requirements of their customers and members. In addition, the alliance partners are establishing a harmonized set of electronic trading rules and policies.
Cantor Exchange expands trading hours
NEW YORK -- Cantor Exchange, an electronic exchange for the trading of U.S. Treasury futures, has extended its trading hours, moving its opening to 7: 30 a.m. Greenwich Mean Time, from 7: 30 a.m. Eastern Daylight Time, as of Sept. 10. The trading sessions continue to 5: 30 p.m. EDT.
This is the first time that CX participants will have access to the exchange before the opening of business in New York.
Electronic access will be facilitated by Cantor Fitzgerald's new e.Speed trading platform. For the first time, the e.Speed trading system will give European market participants a single point of access to the U.S. Treasury futures traded on CX.