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Some Like It Hedged

BNP Asset Management's Pojarliev discusses a variety of options to address foreign currency exposures. Although there is no single best-practice solution for addressing foreign currency exposures, institutional investors have three main choices, he says.

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April 30, 2003

ECN Access Fees Are Investigated

By Gregory Bresiger

The Securities and Exchange, after years of lobbying by the Security Traders Association, is probing ECN access fees, one of the biggest gripes of STA members.

"We're certainly looking at the issue, but we have yet to make a decision on it," said an SEC spokesman. A recent SEC ruling permits ECN access fees to be charged at least until early July. It also reduced the maximum ECN access fee from $0.015 to $0.009 per share. Nevertheless, market makers have consistently complained that they are assessed these fees, but they have no right to assess them.

An ECN official dismissed the complaint. He said that these fees are "merely an example of the competitive marketplace working."

Sanjiv Gupta, an executive with Bloomberg TradeBook, said that costs for investors have come down dramatically over the past year or so. "I believe that is a very good thing and we should let that continue," Gupta said.

Gupta added that, in many cases, access fees can be avoided by looking around for various execution venues. And he also said that the issue of access fees is one of how they are defined. "Fees come in many forms. One can say that many market participants are paying access fees for using the SuperMontage," Gupta said.

He added that he welcomed the SEC efforts in investigating the fees. The best solution to the persistent ECN access fee issue, he added, would probably be for the SEC to continue its practice of limiting the fees. [see related story on STA.]