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Tim Quast
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We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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May 31, 2002

A Life After Nasdaq: After 30 years on the job, a beloved Nasdaq veteran is stepping down.

By Gregory Bresiger

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  • A Life After Nasdaq: After 30 years on the job, a beloved Nasdaq veteran is stepping down.

William Broka, a 30-year veteran of the NASD and Nasdaq, who has just retired, came to the National Association of Securities Dealers as an analyst in corporate finance in May 1972.

He missed being present at the birth of Nasdaq by about one year. But he was there at a time when the baby came close to dying.

Broka served in numerous important posts as Nasdaq went through its survival battles, including vice president of Nasdaq operations, corporate secretary and senior vice president of member affairs. He witnessed the struggles of a market that had many skeptics in the early 1970s. Broka, indeed, was one of the people who was at times a little skeptical.

"There were a number of times when I looked at my wife and said let's try something different," smiled Broka, noting that the biggest surprise of his career was that he would stay 30 years at Nasdaq.

Back in the beginning, Nasdaq wasn't even separately incorporated, something that would happen in 1984. Broka, who began as an analyst with the NASD's corporate finance department, remembers his initial years as a period when a bull market was about to end and a feral bear market in 1973 was about the begin.

"It [Nasdaq] was a very small place to begin with," Broka remembers, "and unfortunately it grew much smaller in 1973 and 74." Broka thought possibly he might join the crowd that was departing.

"Our struggle for the first 15 years was to get parity with other markets," said the 56-year old Broka, who lives in Mount Vernon, Virginia.

Lack of Credibility

Baby Nasdaq lacked credibility when it was trying to crawl. Nasdaq was not viewed as a serious exchange by many companies. And there was another problem. Nasdaq lacked an effective clearing presence. It was not even part of the National Clearing Corporation in the mid-1970s.

"There was a real threat that unless we got and became part of the clearing and settlement systems, so we could process transactions on the then standard of T+5, we would not survive as a viable entity," Broka recalled.

Broka credits former NASD President Gordon Macklin, who would also serve as Nasdaq's first chief executive officer from 1971-1986, as winning this first key battle that gave the fledging market a chance to prosper.

"Without adequate clearing operations, our customers would have never had confidence that they were buying and selling real securities," according to Broka. Yet there had been considerable opposition to Nasdaq. Critics had argued that Nasdaq's companies should not go through the NCC, which later became the NSCC. These were companies, critics said, that lacked substance. But, as Broka made his way up the corporate ladder, Nasdaq was starting to grow up.

A few years later, in 1980 Broka was promoted to corporate secretary. Nasdaq reached another important goal. "This was the first time that we started to be able to calculate the inside market with an actual best bid and offer." This was another milestone, he adds, because before that the best Nasdaq could deliver to traders was a representative bid and price. Again, this was critical to Nasdaq establishing itself as a creditable market.