Commentary

Anne Plested
Traders Magazine Online News

Bottlenecks Ahead

Anne Plested, head of Fidessa's EU Regulation Change programme, has written a short blog arguing that although we should be thankful that ESMA have taken a pragmatic approach to moving things along, more bottlenecks could appear in the future.

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April 30, 1998

Knight & Trimark

By John A. Byrne

The success of Jersey City's Knight Securities, and its affiliated Trimark Securities in White Plains, N.Y., bodes well for a hot initial public offering by the firms' parent. The preliminary prospectus, however, raises important considerations. One is that a large percentage of the company's growth in Nasdaq and third-market trading is due to retail-sized order flow. Narrowing spreads have encouraged the company to penetrate the institutional market.

At the same time, the company has changed its payment-for-order-flow arrangements, paying broker dealers only for orders providing a profit opportunity. Limit orders do not receive rebates. Payment for order flow, in fact, decreased 10.3 percent to $16.3 million for the three months ending March 31, 1998, from $18.1 million for the comparable period in 1997.

In another area, it is possible a top company executive will be suspended from the industry, arising from the Securities and Exchange Commission's three-year Nasdaq probe. The SEC intends to recommend the executive be charged with failure to supervise several transactions executed by traders at another major wholesaler. The executive was employed by that firm before he joined Knight and Trimark in 1995, the prospectus noted.