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March 1, 2004

Schwab Makes a Big Listed Push

By Peter Chapman

Schwab Soundview Capital Markets, a powerhouse in Nasdaq trading, is beefing up its listed trading capabilities.

As part of its initiative to capture institutional order flow, Schwab has launched Schwab Liquidity Network II for listed securities. SLN II is the counterpart to the original Schwab Liquidity Network, which was launched in 2002. It was designed to aggregate retail and institutional orders in Nasdaq stocks.

SLN II will aggregate listed flow from the recently acquired institutional shop Soundview Technology with retail flow from Schwab's parent brokerage and correspondents. The plan is to aggregate liquidity to facilitate internal crossing and provide market information to buyside desks. Charles Schwab & Co., SSCM's parent, has been channeling more of its listed order flow to SSCM. In September 2002, for example, the parent corporation directed all of its order flow to the nation's stock exchanges and third market dealers. At the end of last year, according to filings, it sent 66 percent to SSCM. Last fall, SSCM shut down its Boston Stock Exchange specialist operation.