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September 12, 2006

Amex ECN Plan Still Alive

By Nina Mehta

This spring the American Stock Exchange abruptly tabled its plans to launch an ECN nicknamed, "Seamount." But the exchange's strategic plan "still includes having an ECN that competes directly in New York Stock Exchange and Nasdaq equities," says CEO and chairman Neal Wolkoff. "It was a classic case of trying to do too many things and risking not getting other things done in the time frame we need," says Wolkoff. "But the ECN is very much a priority."

Amex is in the process of developing AEMI, a new electronic trading platform for equities and exchange-traded funds, and upgrading its ANTE system for trading options. Amex is also converting from a not-for-profit to a for-profit organization.

Wolkoff notes that tens of millions of shares executed as offsets to option trades and ETF transactions leave Amex's trading floor every day. "We'd like to provide a cost-effective means to keep those orders here and combine that with other order flow, including crossing and internalized business," he says.

Wolkoff says the ECN will compete on the basis of price, quality of technology, market structure, order types and order flow. He adds that, unlike other ECNs planned, Amex's won't just be a print facility. Wolkoff says the ECN could launch by early 2007.