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A Global Breakthrough

Traders Magazine, August 2004

John A. Byrne

At the height of the bull market only a short time ago, some trading executives were predicting unparalleled, technologically-advanced, round-the-clock global stock trading within a few years. It would be simple and fast. Trading 24/7 was promised for institutional and retail investors in New York, London, Paris, Tokyo - and all the other major markets where securities are traded. With a mouse click, investors on separate sides of the globe and time zones could exchange shares with each other. Alas, it hasn't exactly turned out that way. Technology is improving, but we had a bear market and there are regulatory hurdles. Still, cross-border trades are now a bit easier to execute. Vendors are enhancing networks so that investors in one national market have easier access to another. In the U.S., there are several routes, both direct and indirect. The easiest for some is American Depositary Receipts. Now these ADRs are less complicated. Bank of New York, for example, recently introduced high-speed features in its ADR Direct machine for converting ADRs. Then there are institutional investors in the U.S., such as Franklin Templeton, which access non-U.S. markets directly themselves. But other institutional investors do not have Franklin's sophisticated global custody network. None of this, of course, approaches the amazing vision of a unified, global stock exchange. Yet, all the world's major exchanges will eventually go through the mating rituals once again. The New York Stock Exchange, Nasdaq and the London Stock Exchange, at one time or another, have at least talked about alliances. In the end, it will all boil down to the level of investor appetite for trading outside domestic markets. While the global trading talk has died down, the institutional trading industry in many national markets takes a more international view. The debate on soft dollars in the U.S., for instance, is impossible without following the change of attitude in London to similar commission arrangements. It is therefore fitting - and symbolic - that the Security Traders Association has chosen its first non-U.S. chairman. He's not from London or the Far East. He is, in fact, the unflappable James Duncan, a proud bi-lingual Canadian. He succeeds Boston's Mary McDermott-Holland, who worked tirelessly for the advancement of securities traders. Duncan will have a busy travel schedule during his 12-month term of office and will likely crisscross America and the Atlantic. Indeed, the STA has tried in recent years to stimulate interest in London and other cities outside its New York City base. Each year, the STA has met in London to keep that interest alive and to pursue a global agenda. One day, who knows, the STA may pluck its chairman from London or another European locale. Duncan works as a senior vice president for Canaccord Capital in Toronto. Canaccord has 35 people working in cross-border trading out of Toronto and Vancouver. "Our marketplace is becoming increasingly global

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