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November 8, 2005

Boston's New Exchange Looks to 1st Quarter, 2006 Launch

By Peter Chapman

Trading on the newly formed Boston Equities Exchange (BeX) will commence in the first quarter of next year.

The all-electronic exchange will initially offer trading in securities listed on the New York Stock Exchange. In the second quarter, it expects to commence trading in Nasdaq securities. In the third quarter, it will launch trading in exchange-traded funds.

Trading on the newly formed Boston Equities Exchange (BeX) will commence in the first quarter of next year.

The all-electronic exchange will initially offer trading in securities listed on the New York Stock Exchange. In the second quarter, it expects to commence trading in Nasdaq securities. In the third quarter, it will launch trading in exchange-traded funds.

The BeX, owned and operated by a consortium that includes the Boston Stock Exchange, is effectively a replacement for the BSE's existing equities trading facility. Access to the BeX platform by the BSE's 203 members will be from the BSE floor or offsite.

The BSE will continue to operate as a self-regulatory organization and will regulate trading on BeX. Launch of the BeX still needs approval from the Securities and Exchange Commission.

"We designed the BeX market in response to significant changes within the equities markets of the last several years," said a Boston Stock Exchange spokesperson.

"BeX is the next generation of stock trading."

BeX is owned by BSX Group, a joint venture of the BSE, Fidelity Brokerage, Citigroup, Lehman Brothers and Credit Suisse First Boston.

BSX Group is the second electronic trading consortium that the Boston Stock Exchange has joined in two years. The first, the Boston Options Exchange, or BOX, began operations last year.

Both BeX and BOX use the same underlying trading technology, the NSC platform built by Atos-Euronext.

The system handles both equities and derivatives and is used by 15 markets around the world, including the Montreal Stock Exchange.

The BSE has operated as a quasi-electronic market for several years, but decided it needed a more advanced platform. "BeX uses systems that are specifically designed for electronic markets," said the spokesperson, "not systems that were designed for another era and are being re-engineered."