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Brijesh Malkan
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Solving the Last Mile Problem in Investment Research

One executive takes a forward look at how will the research value proposition change over the short to medium term, and what are the products and strategies managers will turn to?

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May 31, 2001

Public Will See Specialists' Book

By Gregory Bresiger

The Big Board's Project Open Book, which will publicly disclose the bids and offers of the NYSE's 14 specialist firms, is to begin soon.

"The raw data of the limit order book will be available in a public place possibly by the end of June," said Ray Pellechia, a spokesman for the NYSE.

The open book may be at the NYSE Web site or at some other public place that would be easily available to traders and investors, Pellechia said. "We see this as shining sunlight on the market and making it better," he added.

The Open Book project is part of a series of efforts by the NYSE to improve investor confidence. These efforts come in part because of criticism that specialists, as floor-based market makers, have a monopoly on certain stocks because they manage their order flow.

"I think this will be a good thing because it will kill the myth that we have unique advantages," said Robert Fagenson, an NYSE specialist.

Positive Step

Fagenson said that most specialists agree that having more information available - whether for retail investors or upstairs traders - is a good step.

"We're very supportive of this. It will help people who can understand it; that is traders and maybe a few retail investors," according to David Humphreville, who is an attorney for NYSE specialists, which has a group called Specialists, USA.

Left unsaid by Pellechia and other market officials: These steps are taken to prove to legislators and regulators that new tougher rules are not needed. "Everyone," said Humphreville, "is afraid of the SEC and Congress."