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February 1, 2003

Objections to Liquidity Quote

By Gregory Bresiger

The NYSE's planned Liquidity Quote should be revised, Bloomberg officials wrote in a comment letter to the Securities and Exchange Commission.

Liquidity Quote is a service that will display quotes of substantial size for institutions, but Bloomberg officials object that it amounts to a backdoor rules change.

Limit Access

"We believe the vendor and subscriber contracts governing the NYSE's OpenBook and, by extension, those proposed to govern its liquidity quotations," Bloomberg wrote, "are themselves rules changes in that they limit access to facilities of the exchange and have a significant regulatory impact on vendors and subscribers - an impact just as significant as if the contractual obligations were formally denominated rules of the NYSE."

The service would extend the "harmful effects" of the NYSE vendor and subscriber contracts the commission criticized when it approved the OpenBook fees, according to the letter. Bloomberg also wants the Big Board application amended. The NYSE was preparing to publish its proposal in the Federal Register when Bloomberg blasted the outlines of the plan.

A spokesman for the NYSE declined comment.