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Securities traded in the first day included the following: Bank of America Corporation (NYSE:BAC); Calpine Corporation (NYSE:CPN); Diamond Offshore Drilling, Inc. (NYSE:DO); General Electric Company (NYSE:GE); Harley-Davidson, Inc. (NYSE:HDI); Merrill Lynch & Co. (NYSE:MER); Motorola, Inc. (NYSE:MOT); Philip Morris Companies, Inc. (NYSE:MO); Rowan Companies, Inc. (NYSE:RDC); S&P 500 (AMEX:SPY) and Tektronix, Inc. (NYSE:TEK).
"The arrival of Archipelago into Nasdaq InterMarket comes almost two months after our June 13, 2000, announcement of our intention to facilitate the participation of ECNs in the trading of exchange-listed securities," said Dean Furbush, Managing Director of Nasdaq InterMarket. "We expect investors will realize the benefits of ECNs trading NYSE stocks just as when ECNs began extensive trading on Nasdaq in 1997. Approximately one out of every ten trades in NYSE-listed securities is already executed in our market. With the participation of ECNs, we expect that percentage to grow."
Archipelago quotations are now available to traders and investors worldwide through its link to Nasdaq InterMarket on the Nasdaq Workstation II (NWII™) and on vendor terminals fed by the Consolidated Quotation Service (CQS) tape using the trading identifier of Archipelago (ARCA). Nasdaq InterMarket is comprised of Nasdaq market participants, such as Market Makers and ECNs, that quote and trade exchange-listed securities using their proprietary systems, Nasdaq technology, and the InterMarket Trading System (ITS). Through the Nasdaq Computer Assisted Execution System (CAES), participants are linked with each other and gain immediate access to each other’s quotations. CAES also provides participants a means of accessing ITS, a system developed to link the exchanges and Nasdaq InterMarket. Participation of additional ECNs including Bloomberg Tradebook, BRUT, and MarketXT is expected in the near future.
The success of Nasdaq InterMarket has been, and will continue to be, rooted in the ability of its market participants to provide their customers with access to lower execution costs, improved efficiency, enhanced liquidity, near-instantaneous trade executions, and superior customer service. The entry of ECNs into Nasdaq InterMarket promotes market transparency and a greater degree of competition in the trading of NYSE stocks.
Regulatory Changes Provide Catalyst
Recent regulatory changes approved by the SEC enable Nasdaq InterMarket to broaden its offering for trading exchange-listed securities. The SEC supported Nasdaq InterMarket in making technological changes to the Computer Assisted Execution SystemSM (CAESSM) that enable it to deliver orders to participants for an automated response rather than automatically executing the orders. This order-delivery capability effectively eliminates the potential for dual liability (the simultaneous execution of orders against a participant’s quote through both Nasdaq InterMarket and the participant’s own internal system), which could have occurred when only automatic execution was available. The SEC earlier this year granted ECNs the ability to make a market in exchange-listed stocks and, more recently, the NYSE, at the SEC’s urging, rescinded Rule 390, an NYSE regulation that effectively prevented a substantial portion of NYSE issues from being traded by NYSE members anywhere but on the NYSE’s floor.
About Archipelago
Archipelago was formed in December 1996 with software developer, Townsend Analytics. It is one of the original four ECNs approved in January 1997 by the U.S. Securities and Exchange Commission (SEC). Since its inception, Archipelago has offered subscribers outbound order preferencing to effectively create a national limit order book for Nasdaq stocks. Its leading-edge technology, open architecture and innovations, such as sweep functionality based on a proprietary algorithm, facilitate the best execution for investors. Archipelago is also the only ECN with major investors in both institutional and retail financial services sectors. The Archipelago trading system provides investors fast, cost-efficient and anonymous access to the market. Its average daily volume more than tripled since
