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Spoofing, Surveillance and Supervision

Jay Biondo, Product Manager - Surveillance at Trading Technologies, co-authored an article along with James Lundy and Nicholas Wendland, both of Drinker Biddle & Reath LLP, reviewing the CFTC's regulations and expanding efforts, 21st century surveillance and supervision, as well as strategic recommendations.

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November 1, 1999

Back From the Brink? NYSE, NASD IPO Plans on Hold

By William Hoffman

Both major U.S. stock exchanges are now agreed: their public offerings of stock will wait at least until after the first of next year. But at least one is considering a new strategy for drumming up additional capital.

NASD may look into a private placement, prior to an IPO to fund its expansion and acquisition plans "in the short term," explained Scott Peterson, spokesman for the National Association of Securities Dealers. An initial public offering "won't happen in 1999," he added.

A private placement would make shares in NASD available to brokerage firms and perhaps some companies already listed on the exchange, Peterson explained. NASD would probably get a minority stake in any NASD private placement, he said. He declined to elaborate.

Ray Pellecchia, spokesman for the New York Stock Exchange, said the NYSE board recently approved "continued exploration of demutualization, and those discussions would go into next year." He also declined to elaborate.

Why the slowdown, following such a public rush? After all, it was just this summer that both exchanges were the subject of on-record-off record reports they would start selling their own stock, perhaps as early as October.

Both NYSE and NASD denied the other's plans were having any impact on their own schedules. John Heine, a spokesman for the Securities and Exchange Commission said the federal overseer had nothing to add to SEC chairman Arthur Levitt's comments in recent speeches.

Both exchanges have expressed support for spinning off their SRO functions. NASD is halfway there, with its NASD Regulation unit.

But NYSE Chairman Richard Grasso has repeatedly nixed proposals to merge the two regulatory arms, saying NYSE's regulatory arm is "an investment in our brand."