(March 14 – 16:10 ET) – Archipelago, an electronic communications network, and the Pacific Exchange have announced a plan to create the first fully-electronic national stock exchange for stocks listed on the New York Stock Exchange, American Stock Exchange and Nasdaq.
The all-electronic exchange will be integrated with the National Market System to compete with the NYSE, AMEX and Nasdaq, giving investors direct access to the market.
Archipelago launched an application with the Securities and Exchange Commission to operate a similar business about a year ago. It will be withdrawn in light of this agreement.
“The technical flexibility of Archipelago combined with the regulatory oversight of an exchange establishes the first totally electronic stock exchange in the United States,” says Gerald Putnam, CEO of Archipelago. As a result the PCX will be closing its floors in San Francisco and L.A. It expects to receive approval from the SEC later this year, with the migration to a fully electronic operation after that.
As part of the transaction, the PCX will take an equity stake in Archipelago and will join Archipelago’s board. Assorted brokerage firms are investors in Archipelago including BNP Paribas Group, E*TRADE Group Inc., Goldman Sachs Group, J.P. Morgan & Co. Inc., Amercan Century Companies, Merrill Lynch, along with Reuters PLC’s Instinet, and CNBC. The PCX is currently a member-owned exchange that has applied to the SEC for demutualization. Financial terms of the transaction were not disclosed.
-IE Staff