(August 8 – 12:40 ET) – Listed stocks are making their way to the ECNs in the United States.
Yesterday the prominent ECN, Archipelago began trading NYSE- and AMEX-listed stocks in the Nasdaq InterMarket. This is the first time an ECN has traded exchange-listed stocks in the national market system. Historically the NYSE held a stranglehold on its listings via notorious rule no. 390. Yet the Securities and Exchange Commission pushed for the repeal of that rule late last year, opening the field to ECNs and others. ECNs now have the right to make markets in all 3,600-plus NYSE issues on Nasdaq InterMarket.
Archipelago began its experiment with just 11 stocks: Bank of America, Alpine Corp., Diamond Offshore Drilling, General Electric, Harley-Davidson, Merrill Lynch & Co., Motorola, Philip Morris, Rowan Companies, S&P 500 units and Tektronix. It plans to add other stocks this week, and in the future.
“The arrival of Archipelago into Nasdaq InterMarket comes almost two months after our June 13 announcement of our intention to facilitate the participation of ECNs in the trading of exchange-listed securities,” said Dean Furbush, managing director of Nasdaq InterMarket.
“We expect investors will realize the benefits of ECNs trading NYSE stocks just as when ECNs began extensive trading on Nasdaq in 1997. Approximately one out of every ten trades in NYSE-listed securities is already executed in our market. With the participation of ECNs, we expect that percentage to grow.”
Archipelago is owned by an assortment of investors including E*Trade, Goldman Sachs, JP Morgan, Merrill Lynch, BNP Cooper Neff, American Century, Instinet, and CNBC.
Other ECNs are expected to soon follow Archipelago’s lead, including Bloomberg Tradebook, BRUT, and MarketXT.
-IE Staff