Brokerage

After effecting an aggressive face-off among U.S. exchanges, the Securities and Exchange Commission has raised the specter of additional future competition-with exchanges abroad. For the first time in its 73-year history, the SEC is considering regulations that could ease U.S. investors' access to non-U.S. securities products and services through cross-border trading.

Wall Street pros, if nothing else, are always in search of an edge. Whether it's money managers looking to boost their returns for investors or brokers seeking to offer new or better services to their clients, the Street has always been a hotbed of innovation and competition.

Securities lending, a sometimes disorderly business with myriad standards, could have a formal exchange within five years, an industry researcher predicts. As far as transparency goes, the equity securities lending business now resembles the credit derivatives market of the 1990s or the Nasdaq prior to order-handling rules, according to a recent report by researcher Vodia Group. An exchange would help the equity securities lending market provide clearer pricing and also give the practice more credibility, the report says.

Citi's acquisition of Automated Trading Desk last month propels it into the wholesaler big leagues.

Crossing engines devoted to algorithmic flow are becoming more popular. Merrill Lynch and Morgan Stanley, the only two firms to deploy these niche dark pools intraday, report greater usage and growing volumes. The newfound popularity of the systems comes as more flow is executed via trading algorithms and customers seek to avoid the costs of going to the public market.

Nasdaq has begun supplying its issuers with lists of the broker-dealers making the most aggressive markets in their securities.

EdgeTrade, a small, New York-based direct-market-access broker geared to the buyside, is angling for sellside clients. The firm expects Regulation NMS and the growth of dark liquidity to make that job easier, as brokers realize they need smart order routing to get better executions.

The percentage of commission dollars earmarked for client commission arrangements (CCAs) or commission-sharing arrangements (CSAs) is set to increase substantially in the next couple of years at some of the bulge-bracket firms.

New York Stock Exchange floor brokers now don't have to go upstairs in their search for liquidity beyond the NYSE.

Moving analysts to the trading desk has proved beneficial at Merrill Lynch.

Moving analysts to the trading desk has proved beneficial at Merrill Lynch.