"We're obviously delighted with the decision," said PCX Chairman and CEO Philip D. DeFeo. "We've been working on this proposal for a very long time. The SEC staff has been diligent and thoughtful, and we thank the Commission for supporting a market that is more transparent and more efficient, one that will serve investors well. ArcaEx combines the best in current technology with a progressive market structure, creating a low-cost, highly efficient market that is accessible from unlimited remote locations. It's the market of the future."
"ArcaEx will provide a much needed competitive alternative to traditional market centers," said Jerry Putnam, CEO of Archipelago. "Our goal for ArcaEx is to create an unbiased exchange that provides all market participants with a consistent and fair place to trade, without the hidden information and special advantages available to only a select few today. The approved rules provide a market structure that addresses the needs of investors looking for an open place to trade, one that uses price-time priority and links pools of liquidity in an intelligent way."
ArcaEx will enable all buyers and sellers, including broker-dealers, sponsored institutions and market makers to meet electronically, combining the best of current technology with a forward-thinking market structure. ArcaEx has redefined the roles of liquidity providers by enabling market makers to participate and price improve orders automatically. Additionally, corporate issuers will have the opportunity to list their shares on a venue that provides an open book, allowing all investors to see the same information when making trading decisions and consistent order handling, since no intermediary touches an order on this technologically advanced exchange.
The Pacific closed its equities trading floor in Los Angeles this past May, in preparation for the launch of ArcaEx. It will continue operating its San Francisco equities floor until ArcaEx begins trading, which is currently scheduled for early 2002. ArcaEx will not affect the Pacific's options floor. Archipelago and the PCX had previously announced their intentions to form a new national market in March 2000.
About Archipelago:
The Archipelago ECN was formed in December 1996 with software developer Townsend Analytics. It is one of the four original ECNs approved in January 1997 by the SEC. Archipelago uses a proprietary algorithm to find the best price for orders and provides an open limit order book for Nasdaq and listed stocks. Its leading-edge technology, open architecture, and innovations facilitate 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 has more than doubled since the third quarter of 2000. Archipelago's top 10 volume days have all occurred within the past month.
About PCX:
Founded in 1882, the Pacific Exchange has a long history of innovation. It was the first exchange in the world with electronic order routing, execution and reporting systems; the first to develop net clearance and settlement systems; and the first exchange in the U.S. to demutualize its equities business. It is the third largest stock options exchange in the world.
