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July 31, 2003

Canada's New York Boutique Eyes U.S. Trading Expansion

By Peter Chapman

Harris Nesbitt Gerard (HNG), formerly Gerard Klauer Mattison, is positioning itself to become a bigger player in U.S. equity trading now that it's owned by one of Canada's largest banks.

The New York-based boutique, which became a unit of BMO Financial Group last month, plans to expand its research list to accommodate BMO's equity underwriting strategy. The move is expected to translate into more volume for the trading desk, say execs.

"Because of the support of BMO we can do much more than we could as an independent firm," said Manny Gerard, formerly chairman and CEO of Gerard Klauer. "As we build our research we expect, over time, to be a much more active trading desk."

HNG's research department covers 200 U.S. companies, specializing in eight sectors including consumer, healthcare and technology. The plan is to expand into sectors represented by BMO's corporate banking customers, many of which are located in the Midwest.

The HNG desk traded about 1.2 billion listed and 1.4 billion Nasdaq shares last year, according to AutEx/BlockDATA. Those figures earned it rankings of 36 and 42, respectively.

The firm says it has no plans to chase higher rankings for their own sake. That's despite the fact BMO is the largest trading house in Canada. "We're not playing the rankings game down here," said Eric Tripp, head of the equity division at BMO Nesbitt Burns. "We live that in Canada, but we have no interest down here."