Commentary

Jos Schmidt
Traders Magazine Online News

Reducing the Regulatory Burden on Public Companies, Yes Please But...

In this commentary, NEO's Jos Schmidt discusses regulatory requirements and needs in the Canadian equity markets.

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January 1, 1998

Happy Birthday, Tradebook

By Staff Reports

A money manager using Bloomberg Tradebook an electronic communications network (ECN) can view market makers quotes for Nasdaq stocks, as well as INCA and BTRD, the identifiers, respectively, for Instinet and Bloomberg customers.

New York-based ESI Securities is Tradebook's executing and clearing broker. The ECN started operations in December 1996. Bloomberg said volume is averaging about seven million shares daily.

Customers seeking anonymity can post trades through Bloomberg's book for execution. However, broker customers using the Tradebook terminal to post an indication of interest transparent to institutional investors may be able to complete a trade by telephone, without having to pay a commission.

While Bloomberg acknowledges that its system may be used this way, the company is not perturbed because it said these customers enhance liquidity.

At the moment, Bloomberg Tradebook trades Nasdaq stocks, but plans to add listed stocks early this year, said Kevin Foley, equity trading manager at Bloomberg Tradebook.

For customers in the U.K., however, Bloomberg offers a link to Tradepoint Financial Network's electronic trading system in London. More importantly, with Securites and Exchange Commission approval of Tradepoint in the U.S. pending, Bloomberg is planning to provide a connection for U.S. institutions that want to trade U.K. stocks on Tradepoint.

Tradepoint's volume was described by a source as "not great, and relatively low" compared to Instinet's volume. Nonetheless, the source noted that if U.S. institutions are allowed to participate, then a critical mass could be achieved. Moreover, if Bloomberg Tradebook becomes a channel for U.S. investors to access Tradepoint, that could pump up liquidity as these investors access a roster of more than 1,900 British stocks.