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May 31, 1999

Atkin Criticizes Tinkering at SEC

By Michael L. O'Reilly

Douglas Atkin has the highest regard for Arthur Levitt, and the job he has done as chairman of the Securities and Exchange Commission.

But Atkin, the president and chief executive of Instinet Corp., feels the SEC's division of market regulation has tinkered with the U.S. equity markets in recent years - particularly Nasdaq - instead of helping push for fundamental reform.

"Market regulation did too much fiddling with market structure without having a clear end-game in mind," Atkin said. "You can't tinker with things without a real plan. Nasdaq has been put into a bit of a mess. It's been left as something that's not the old market, and it's certainly not the new market."

Atkin blames market regulation under its previous head, Richard Lindsey, for implementing new rules in the equity markets without fully planning for the outcome. Atkin cited the order handling rules and the agency-quote proposed as examples. He said Lindsey's successor, Annette Nazareth, has indicated she would like to help guide the markets toward more fundamental change.

Lindsey left the SEC in February to join the clearing subsidiary of New York-based Bear, Stearns & Co. He did not return requests for comment.

A spokesperson for the SEC defended the commission however, saying it leaves innovations in the equity markets to market participants. "We tend not to see the SEC as a shaper," the spokesperson said. "We consistently think the markets should do the shaping. We stay on the periphery, making sure investors get the most out of the markets."