Momtchil Pojarliev
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Some Like It Hedged

BNP Asset Management's Pojarliev discusses a variety of options to address foreign currency exposures. Although there is no single best-practice solution for addressing foreign currency exposures, institutional investors have three main choices, he says.

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April 1, 1999

At Deadline

By John A. Byrne

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STA Testifies

Security Traders Association Chairman Art Kearney and STA President and Chief Executive Lee Korins testified before the Senate Banking Subcommittee on Securities on March 24, voicing the trade group's opposition to Section 31 transaction fees. The fees, roughly the equivalent of 1/300th of one percent on the cash value of each stock transaction, fund the Securities and Exchange Commission's annual budget. Last year, the SEC collected more than five times its estimated budget in Section 31 transaction fees.

"SEC fees negatively impact our firm's trading revenues. Reduced revenues translate to fewer jobs," said Kearney in his testimony. Kearney, who is also director of capital markets at John G. Kinnard & Co. in Minneapolis, added: "For us it means hiring one less analyst, one less trader and one less support staff [member]. Reduced revenues go right to [the] core [of our] business decisions."

The two STA leaders praised Sen. Rod Grams (R-Minn.) and Sen. Phil Gramm (R-Texas) for making reductions in SEC fees a priority for the Senate Banking Committee this year. Gramm chairs the Senate Banking Committee, while Grams chairs the Senate Banking Subcommittee on Securities.


The National Association of Securities Dealers is

reportedly considering revising its plan for a consolidated limit-order book on Nasdaq. NASD Chairman Frank Zarb, speaking before a group of independent broker dealers in New York, said he would be counting on support from the group if a plan is reinstated for consideration. The group is led by outspoken NASD board member Alan Davidson. He is also president of Long Island-based Zeus Securities.

Zarb reportedly said a new limit-order book would be open to member firms free of charge. No other details were available. A spokesperson for the NASD could not be reached for comment. It is not clear how different the plan would be from the last failed effort for a limit-order book, which was torpedoed by some market makers.

PHLX System

The Philadelphia Stock Exchange (PHLX) is

launching a new trading system on its equity floor. The Securities and Exchange Commission approved the PHLX's application to run the Volume Weighted Average Price (VWAP) Trading System, or VTS. The VTS is a pre-opening order-matching system for the execution of large-sized stock orders at the VWAP.

VTS executions will take place at about 9.20 a.m., with the VWAP calculated and assigned at 4.20 p.m. each day. That will follow a morning order-entry period. The VTS will be available as a separate exchange system to PHLX members and their customers. No start-up date was announced by the PHLX. "The VTS will enable investors to receive a volume-weighted-average-price execution for the first time on a U.S. securities exchange," said Meyer S. Frucher, PHLX chairman and chief executive. "The PHLX is looking forward to bringing this unique execution system to the marketplace."

Locked or Crossed

The board of the National Association of Securities