Sen. Judd Gregg (R-N.H.), chairman of the Senate Appropriations Commerce, Justice, State and Judiciary Subcommittee, has scorned the battle to gain relief from 31(a) transaction fees.

Dismissing the fight as a "rhubarb," Gregg may now have turned his back on the appeals of the 39-member ad hoc 31(a) coalition, representing Nasdaq and other exchanges.

In a brief interview with Traders Magazine, Gregg questioned whether the dollar savings of reduced transaction fees would benefit individual investors' or swell Wall Street profits.

Gregg is reluctant to accommodate a technical correction as a legislative route to bringing relief on 31(a) fees, a Capitol Hill source said. "Of course, the New York community and other traders cannot understand how a Republican can countenance this," the source added.

Estimates

Meanwhile, a source at the National Association of Securities Dealers estimated savings at $18 million to $30 million on one set of 31(a) transaction reductions, a drop of between 12.5 percent and 20 percent.

The coalition has targeted principal trading for a reduction in 31(a) fees, including riskless principal trades, or trades in which a broker dealer buys shares of stock that he does not trade (earning a commission by simultaneously selling the stock to a market maker).

Advocates of a fee reduction argue that Congress did not consider the structural differences between Nasdaq and the listed exchanges when they imposed 31(a) fees on Nasdaq transactions. "The result is that many transactions on Nasdaq that are executed to fill a single customer order are subject to the fee – creating multiple assessments," a Securities Traders Association membership notice stressed.

Interestingly, this view may be getting the sympathetic ear of Securities and Exchange Commission Chairman Arthur Levitt, as reported last month.

"There is some question as to whether Nasdaq double-counts fees, which they do, and I think we are going to shortly see some adjustment in that, which will reduce the fees," Levitt told Gregg's subcommittee on March 19. Asked for an elaboration, SEC spokesman John Heine said, "the statement says what it says."

Meanwhile, as of mid-March, Nasdaq was required to transmit to the U.S. Treasury fees collected for the period of Sept. 1, 1997 to Dec. 31, 1997.

Wall Street firms have been inundated with warnings about potential Year-2000 computer glitches. The media, consulting firms and other groups are stoking the fires of discontent. NASD Regulation, the regulatory subsidiary of the National Association of Securities Dealers, is no exception.

In a foreword in its Regulatory and Compliance Alert newsletter, NASD Regulation pointed out what experts have been hammering home for months.

A typical securities firm should have a Year-2000 plan with these activities completed: a review of all business aspects to determine where Year-2000 failures may occur; a completion of an inventory of any replacement or renovations required; identification of costs and resources; and notification of suppliers and partners to assess and certify Year-2000 readiness.

"The plan should also define how the firm will test or validate its Year-2000 readiness, including options for participating in industry-wide testing, and contain contingency-planning approaches," NASD Regulation stated in the newsletter.

Timely

NASD Regulation urged all members of the NASD to implement their action plans effectively so that they achieve timely Year-2000 compliance.

An irate former Securities and Exchange Commission policy-maker has accused the agency of not giving helpful answers to ordinary regulatory questions from the trading community.

Edward Fleischman, an SEC commissioner from 1988 to 1992, told attendees at an equity-trading conference in April that it was "most surprising to hear senior SEC staff members bob and weave and dodge any straight answers to honest questions."

Fleischman told attendees at the conference, sponsored by the Security Traders Association at New York's Fordham University, that ambiguous responses made it difficult for buy-side and sell-side desks to properly handle trades between the best prevailing bids and offers.

"Ask [the SEC] if the firm is required to cross those orders in-house, and the answer will be an historical review, culminating in a reference to the principles enunciated in the limit-order display-rule adapting release," Fleischman said. "Repeat the question explaining that the trading desk won't be satisfied with a reference to the principles enunciated in the limit-order display-rule release, and the answer will be humorous, with explanations of the relevant dealer-examination modules."

Fleischman, now associated with the law firm of Linklaters & Paine, said the roots of best-execution obligations are decades old, and took on fresh light with the 1975 Securities Amendments Act.

Best-execution obligations became a hot subject as the SEC issued its 21(a) report in August 1996, and censured the National Association of Securities Dealers for not policing its own members.

But that has hardly helped traders get straight answers on best-execution obligations, Fleischman contends. "Good Lord," he added, "we deserve some straight answers, even if they are frightening or counterproductive or wrong."

Richard H. Walker, general counsel at the Securities and Exchange Commission, succeeded William R. McLucas as the commission's top enforcement officer.

The enforcement director, responsible for investigating misconduct in the securities markets, is considered the second most important position at the SEC, after that of chairman.

Walker, who joined the SEC in 1991, is considered to be a hard-line fighter of securities abuses. Before serving as general counsel, Walker was the director of the SEC's Northeast regional office. In that position, he helped expand the parameters defining insider trading.

"Dick has demonstrated good judgment, intelligence and dedication to investor protection," said SEC Chairman Arthur Levitt, in a prepared statement. "His talent as a litigator and a prosecutor are remarkable."

McLucas – who left after eight years as the SEC's enforcement director – has been hired by Wilmer, Cutler & Pickering, a prominent Washington law firm specializing in the securities industry. McLucas joined six other former SEC lawyers at the firm.

Paul Bracco, a former sales trader at Sherwood Securities in Jersey City, joined New York retail house Sands Brothers as head of sales trading. Bracco will report to Sabin Danziger, head of capital markets for the firm.

BT Brokerage, a New York-based discount-brokerage subsidiary of Bankers Trust, promoted Ellen Bellamy-Gelman from assistant vice president to vice president of institutional trading.

Prior to its parent's announced merger with Wall Street giant Travelers Group, Citicorp Securities Services in New York appointed Glen Stifelman vice president of trading. Responsible for the firm's trading room, Stifelman joined the Citicorp subsidiary from Green Line Investor Services in New York, USA, the U.S. subsidiary of Canada's Toronto-Dominion Bank.

Citicorp also named Frederick Chapey Jr. head of global derivatives and emerging capital markets sales and trading. Chapey, based in New York, was previously head of global derivatives, and deputy head of capital markets, at Chase Manhattan Corp. in New York.

Bob Michele was named head of the U.S. fixed-income department at New York-based Schroder Capital Management. Previously a managing director and portfolio manager at Blackrock Financial Management in New York, Michele will report to Sharon Haugh, chairman of Schroeder.

Boston-based Thomson Investment Software, a provider of investment-management and operations software, promoted John Jones to global sales director. While continuing to manage the firm's U.S. sales efforts, Jones will coordinate Asian, European and South American sales management.

The Rock Island Company, parent of Rock Island Specialists and Rock Island Securities, appointed Ed Donnellan president. Donnellan joined Chicago-based Rock Island from Sanwa Futures, where he served as the Chicago firm's president. He will report to Andrew Davis, principal and chairman of Rock Island.

Rock Island also completed an acquisition of Chicago's Andover Securities. The acquisition makes Rock Island the largest specialist operation on the Chicago Stock Exchange, with over 500 assigned stocks and 20 traders.

Steve Iskalis rejoined Cleary Gull Reiland & McDevitt in Milwaukee as an institutional trader. Iskalis left Cleary Gull two years ago to join the institutional desk at Vector Securities in Dearfield, Ill.

Cleary Gull was recently acquired by Boston-based Freedom Securities.

The New York Stock Exchange named Janice Stahura O'Neill vice president of listing operations. Overseeing listing-compliance operations and corporate compliance functions, she will report to Catherine Kinney, group executive vice president. O'Neill was previously managing director of listing operations at the NYSE.

The Securities Industry Association named Scott C. Kursman assistant general counsel. Acting as staff adviser to the SIA's Capital Markets Committee and co-adviser to the Federal Regulation Committee, he will report to Stuart Kaswell, SIA general counsel. Kursman is a former assistant general counsel at New Yortk-based Prudential Securities, and an attorney for the Securities and Exchange Commission.

Andrew Fishkind joined B-Trade Services – a New York-based, wholly-owned subsidiary of The Bank of New York – as director of client services. B-Trade provides execution and clearing systems for Bloomberg Tradebook. Fishkind had previously spent most of his career with Instinet in New York, most recently serving as vice president of international equities.

Robal Johnson and Chris Pilder joined New York investment bank Donaldson, Lufkin & Jenrette as senior position traders. Johnson is the former head of trading and sales trading at HSBC Securities in New York. Pilder was previously a senior trader on the listed block desk at Salomon Smith Barney in New York.

CSK Software – the New York-based global financial-information arm of CSK Corporation – hired Steven Suzuki as director of Japanese accounts. Suzuki is responsible for overseeing sales of Japanese insitutional accounts in New York, and liasons with the firm's Tokyo-based headquarters. He was previously a senior vice president at Nomura Research Institute in New York, marketing the company's network management software in the U.S.

The American Stock Exchange elected five new governors; three of the new representaives were chosen from the public sector, and two new delegates will represent the securities industry.

Public representatives elected to three-year terms were: Alan S. Blinder, an economics professor at Princeton University, James L. Packard, chairman and chief executive of AMEX-listed Regal-Beloit Corporation, and Warren Rudman, a former U.S. senator from New Hampshire.

Chosen to represent the securities industry, Leslie C. Tortora, managing director of New York-based Goldman, Sachs & Co., and Barry Ridings, managing director at Baltimore-based BT Alex. Brown & Co., were also elected to three-year terms.

Walnut Street Securities relocated its headquarters in St. Louis. A broker-dealer firm serving more than 2,000 registered representatives, Walnut Street's 100 employees moved to 400 South Fourth Street, Suite 1000 in St. Louis.

Perrin Long Jr., a respected veteran analyst of brokerage firms, died on April 8 in Stamford, weeks after suffering a debilitating stroke. One of the first Wall Street pundits to follow the brokerage industry as an emerging market, Long most recently worked with Horsemouth, an Internet information service. He was 70.

Will the stunning success of an amazingly young Nasdaq wholesaler, and its affiliated third-market trading firm, be parlayed into a hot initial public offering? Jersey City's Knight Securities, and Trimark Securities in White Plains, N.Y., must hope so.

Roundtable Partners LLP, the holding company for both firms and its subsidiaries, is planning to go public this year on Nasdaq, filing a preliminary prospectus at the Securities and Exchange Commission on May 1. The proposed ticker symbol is NITE.

The prospectus noted that 10,000 common shares would be issued at an estimated offering price between $10 and $16. The lead manager is San Francisco-based BancAmerica Robertson Stephens.

Market Share

Both Knight, a Nasdaq wholesaler owned by a consortium of smaller broker dealers, and Trimark, a third-market firm, were launched in 1995, quickly building market share. As stock markets climbed and more money poured into mutual funds and stocks, Knight and Trimark were not far behind.

Knight's advertised share volume, ranked by Boston-based AutEx, grew from 614.7 million shares for January 1997, to 1.2 billion shares for December 1997, and to 1.9 billion shares this March, representing 9.9 percent of total market share.

According to the National Association of Securities Dealers, Trimark's reported share volume in New York Stock Exchange-listed securities grew from 234.2 million shares for January 1997, to 338.4 million shares for December 1997, to 445.6 million shares this March, representing 33.1 percent of total NYSE third-market volume.

With the acquisition of Chicago's Tradetech Securities, Trimark's volume grew most rapidly – to 2.4 billion shares for the three months ending March 31, from 1.5 billion shares for the comparable period in 1997. The volume accounted for 33 percent of Roundtable's overall share volume.

Employees

The combined trading entities employ 337 people. Of Knight's 246 staffers, 142 are employed in market-making activities. At Trimark, 55 people are employed in market-making activities. The firms clear their business through New York-based PaineWebber's subsidiary, Correspondent Services Corp.

Both firms named Omaha-based AmeriTrade, Boston's Brown & Company, San Francisco's Discover Brokerage and E*Trade, and global giant Merrill Lynch & Co. among its customers. While Knight and Trimark have strong niches executing retail-sized orders, the prospectus noted that they "plan to accelerate [their] penetration of the market for institutional investors, which it believes provides an opportunity for growth, and offers higher profit margins [than retail business]."

Knight also plans to increase its market share through the launch of its e.Knight software, which it said will enable broker-dealer and institutional customers to access Knight and Trimark from their desktops via the Internet and other electronic systems.

In a controversial victory for the New York Stock Exchange, PaineWebber closed all of the regional specialist units managed by PaineWebber Specialists.

PaineWebber had operated specialist units on the Cincinnati Stock Exchange, the Boston Stock Exchange and the Pacific Exchange, covering more than 500 stocks. In all, 35 employees were laid off with the closings. The firm will still manage its specialist unit on the NYSE.

PaineWebber declined to comment on the decision, saying only that it was part of an ongoing reevaluation of the firm's equity business. The firm will retain membership and continue to route orders to the three regional exchanges.

But the move by New York-based PaineWebber was significant in the heated rivalry between the NYSE and the regional exchanges over market share.

"The NYSE is absolutely recruiting business for their exchange," said David Colker, chief executive of the Cincinnati Stock Exchange, on the loss of PaineWebber. "I am concerned for the public investor that 85 percent of the trading in NYSE stocks is done in one place."

The regional stock exchanges function primarily as alternative sources of liquidity for NYSE-listed stocks. The regionals offer low cost structures and slightly different rules for investors looking to execute orders in listed stocks. More than 15 percent of volume in NYSE stocks is traded away from the Big Board.

Citing an interest in investor protection, the NYSE has lobbied with member firms for an increase in order flow. And in numerous instances, the Big Board has succeeded.

In 1995, brokerage giant Merrill Lynch & Co. closed their specialist operations on the regional exchanges, and announced their intention to route all listed orders only to the NYSE. The firm alleged it would get better prices for customer orders at the Big Board.

But Robert Jennings, a professor of finance at Indiana University who studied the move by Merrill, suggested that the firm may have received concessions from NYSE specialists for sending all orders to the NYSE.

"There was probably political pressure for Merrill to pull out of the regionals," Jennings added.

In 1996, the former Smith Barney followed suit. The firm – now a part of New York-based Salomon Smith Barney – closed its specialist operations on the Cincinnati Stock Exchange after sustained pressure from the NYSE.

And when PaineWebber made its announcement on April 16, it was not considered surprising. A source at the Boston Stock Exchange said the firm had given prior indication that it would pull out of the regional exchanges.

The source added that political pressure may have largely contributed to PaineWebber's decision. In fact, Joseph Grano, president of PaineWebber, has publicly remarked on the heavy recruitment made by the NYSE.

"He's [NYSE Chairman Richard Grasso] been yelling at me for three years, saying, 'What are you doing, the order flow should be coming to the primary market,'" Grano said in an April article in the Wall Street Journal.

Nevertheless, Grano has denied that PaineWebber's decision was influenced by Grasso's lobbying or political pressure.

Tumult

Separately, PaineWebber has displayed a tumult within its own equity operations in recent months that suggest a reevaluation of operations.

In November, seven Nasdaq traders left the firm, including head trader Richard Bruno. PaineWebber refused to comment whether the resignations were forced or voluntary. Patrick Davis and William Heenan succeeded Bruno as co-heads of over-the-counter trading. Just two months later, Heenan left the firm to join the Nasdaq desk at Donaldson, Lufkin & Jenrette in New York.

And over the last 12 months, the firm stopped making markets in more than 200 Nasdaq stocks, cutting its list from 735 to 525.

The National Association of Securities Dealers is planning more crack downs on trading scams in non-Nasdaq, over-the-counter securities.

But the NASD's attempts to drive the sleaze artists out of the non-Nasdaq, OTC market could end in disappointment. About 8,000 stocks qualify as non-Nasdaq, OTC securities, trading on the NASD-owned, electronic OTC Bulletin Board, and the manually-traded, independently-run pink sheets.

While the vast majority of OTC stocks are issued by legitimate entities supported by honorable market makers, a small minority give traders a black eye and rouse the NASD's enforcement machine.

The OTC Bulletin Board, in particular, seems to attract much of the criticism.

"The biggest problem in the area of small-cap fraud has been with the OTC Bulletin Board," said Phil Feigin, securities commissioner for the state of Colorado. "There's not very good enforcement of the bulletin-board market."

The OTC Bulletin Board, a somewhat secretive world where the bid and asked spreads can be gargantuan, is perceived as a breeding ground for some of the market's most unscrupulous personalities.

With stock markets scaling new heights, Feigin and others believe that investors' temptations to parlay their capital gains to even greater heights could motivate sinister traders to find avenues to perpetrate their fraud, in the face of new enforcement regulations.

"You can make enforcement harder, but it's not going to decrease the level of fraudulent activity," Feigin said. "These are people with sky-high egos that honestly believe that they won't get caught."

NASD regulators have proposed three initiatives designed to protect investors from being ripped-off by fraudulent broker dealers.

In a release, the NASD said the initiatives proposed:

* Allow only those companies that report their current financial information to the Securities and Exchange Commission, and banking or insurance regulators, to be quoted on the OTC Bulletin Board. (About 50 percent of the OTC companies currently report their financial results to the SEC.)

*Require brokers, before they recommend a transaction in an OTC security, to review current financial statements on the company they are recommending.

*Require that investors receive a standard disclosure statement emphasizing the differences between OTC securities and other market-listed securities prior to the initial purchase of an OTC security.

"There has been a dramatic increase in the number of micro-cap securities in the public market place," said Frank Zarb, NASD chief executive, in a prepared statement. "These measures are designed to ensure that the level of integrity that exists in other parts of the market is achieved in the smaller-capitalized section as well."

At the same time, the SEC has its own proposals on non-Nasdaq, OTC securities that would put more responsibility for investor protection on market makers. At press time, the NASD's proposals are expected to be submitted to the SEC for final approval and public comment.

Investor scams have been around for as long as Wall Street has existed. But today's scams may be more menancing, as evident by well-publicized reports of organized crime infiltrating the OTC market.

Mob tactics on the market-making side allegedly have included the intimidation of legitimate market makers who have refused to artificially inflate the value of stocks. Naked short-selling is reportedly another favorite tactic.

On the retail-brokerage side, scam artists have used the infamous three-call, cold call. A broker blindly throws out feelers, asking investors whether they would be interested in positive news affecting a security, calls a second time to reinforce that interest among naive investors, and closes the sale when the purported positive news develops.

Some brokers dupe a "reload list" of investors snared in the past; others dupe affinity groups or associations. Another tactic is sales of stocks in companies registered out of state, making it difficult for investors to get specific information about a company's operations.

When investors do purchase a stock and later decide to sell, corrupt brokers either won't be available or will require the investor to purchase a different stock in order to get out of their current position, Feigin said.

To be sure, the NASD has generally been tightening listing standards in the full universe of OTC stocks to help fight sleaze. And many investors are happy with how their small-cap and non-Nasdaq OTC holdings are traded and perform. Indeed, many good companies have no option but to go public on the OTC market.

"We really had no choice," said Gary Placek, head of syndicate operations at Robert W. Baird & Co., a Milwaukee-based firm, which placed OTC offerings for Tarpon Coast Bancorp (OTC:TCBA) and Macatawa Bank (OTC:MCBC), two new names on the OTC Bulletin Board in 1998.

"These are de novo banks that wouldn't have been able to qualify for Nasdaq Small-Cap listing, and certainly not for National Market System listing," Placek said. "They're not projected to make any revenues for a couple of years."

The initial listing of all stocks trading on the OTC Bulletin Board requires sponsorship by an NASD-affiliated broker dealer.

At press time, market makers in Tarpon included: Alan C. Ewing & Co.,Tampa; Hill, Thomson, Magid & Co., Jersey City; and Paragon Securities, New York. Market makers in Macatawa included The Ohio Company, Columbus, Ohio; Herzog, Heine, Geduld, Jersey City; and Monroe Parker Securities, Rochester, N.Y.

"It's turned out to be a real nice market for [the two banks]," said Placek. Both of the companys' stocks have benefited from investor appetite for community banks, Placek noted. Tarpon closed trading April 28 at 15 3/8, 53.75 percent above its Jan. 26 debut at $10 a share. Macatawa closed the session April 28 at 15 3/4, 57.5 percent above its April 1 debut, also at $10 a share.

All told, 1,200 new companies made the pink sheets and the OTC Bulletin Board their home last year. Of that number, 14 companies went public via the OTC Bulletin Board, raising $102.4 million in new capital. These include four banking entities; three healthcare-related companies; two issuers from the high-tech and telecommunication sectors; two food wholesalers; two miscellaneous holding companies; and one foreign entity.

The average return above offering for these companies through the close of trading April 28 was 6.86 percent.

While market sources believe the NASD initiatives give investors more protection, others suggest additional steps may need to be taken.

"After being in this business for 30 years, you realize there's no silver bullet," Feigin said. He suggested that closer cooperation, including reciprocity agreements between federal regulators and state regulators, might help.

"The NASD and the SEC could beef up their enforcement actions if they were permitted to take into account an order issued in a particular state," he said. Under the current laws, individuals convicted of security fraud in Colorado by Feigin's office can escape detection by moving to any of the other 49 jurisdictions.

Michael Robinson, a spokesman for NASD Regulation, the NASD's regulatory arm, declined to comment on these laws, but he did note that federal regulators are considering at least one other alternative, potential authority for the NASD to halt trading in OTC Bulletin Board securities under certain circumstances.

Internet-based networking technology is heading toward the trading floor, promising traders faster and easier access to a wide array of market data and analytics.

The technology has spawned Intranets, linking traders to each other and to information resources both inside and outside their firms.

Intranets are a type of private network using Internet technology to allow electronic communications among users. A company e-mail system is a good example.

As Intranets begin arriving on trading floors over the next few years, desktops will undergo radical transformations.

Standalone computer workstations and terminals will be replaced by "thin clients" – stripped-down PCs costing as little as $500 – that are designed specifically for Intranet use.

Intranet technology's impact on traders will be immense, said Lawrence Tabb, group director of The Tower Group, a Newton, Mass.-based firm that analyzes technology trends in the banking and securities industries. "Intranets will give traders a degree of data flexibility and integration they can now only dream about."

According to Tabb, the era of separate terminals handling individual proprietary data feeds will pass into history.

"Traders will be able to receive information provided by a wide variety of suppliers, fed directly to their workstation via an Intranet," he said. "Their biggest problem will be finding the best sources in a sea of information."

Cheaper Information

Much to the consternation of proprietary financial-content providers, a great deal of the information Intranets can pull in from the Internet is comparatively inexpensive, or even free.

While not a substitute for the proprietary news streams, the materials traders can have delivered to their desktop from the Internet provide an additional level of information and analytic support.

TheStreet.com (www.thestreet.com) attracts subscribers with yearly fees of less than $9 per desktop, depending on the Intranet's size.

The information on the web site isn't as deep as the content carried by the proprietary providers, but is still quite extensive, and includes company news, opinion columns, delayed and historical quotes, Securities and Exchange Commission documents and intraday and historical charts for more than 24,000 stocks, funds and indices.

Alan Maguire, strategic sales manager for TheStreet.com, says the upstart service fills a previously empty niche.

"Prior to the arrival of companies like ours, information was primarily the domain of established vendors, like Reuters or Bloomberg, who covered the markets with plain facts, or research houses," he said.

"They have often an axe to grind regarding the markets and companies they comment on," Maguire added. "We bring a fresh, original approach to financial news by delivering an unbiased, insider's view of the industry."

Free Source

A free, Internet-based information source traders can turn to is BusinessVue 2.0 (www.businessvue.com), a program that pulls together information from multiple sites and sends it to traders through their Intranet-connected desktop.

In its final test stages at press time, the software allows traders to obtain corporate profiles, current and archived news stories, analyst recommendations, SEC filings and delayed and historical stock quotes. The product can also export data to a variety of standard business programs, including Microsoft Word and Microsoft Excel.

"We're ancillary to the Bloomberg machine and other products traders are using. We provide another data stream they can use to make informed decisions," said Denny Michael, vice president of marketing for Alpha Microsystems, the Santa Ana, Calif.-based company that publishes BusinessVue 2.0.

Although the advertiser-supported software and content is available at no cost, Alpha also markets an advertising-free version (with customized data feeds) that more closely resembles the service offered by proprietary-content providers.

Costs start at $10,000 per site, plus monthly and per-user fees that vary according to the size and scope of the Intranet. Michael believes that all financial information will eventually be delivered to traders via the Internet and Intranets.

"You're already seeing the proprietary providers moving in that direction," he said. "The stranglehold these companies once had is being eliminated by the Internet."

Information Overload

While Internet and Intranet-supplied data streams offer traders an almost unlimited array of information sources, the sheer volume of incoming material can pose a problem similar to that of visiting an all-you-can-eat buffet – serious indigestion. Combine Internet and Intranet-supplied data with proprietary feeds, and the situation can be overwhelming.

"Simultaneous access to data from multiple real-time and historic sources is a critical problem confronting the trading floor in virtually every firm today," Tabb said. "The ability to access multiple data sources from an integrated graphical interface meets a critical need."

To answer the problem of information overload, Leading Market Technologies (www.lmt-expo.com), a Cambridge, Mass. software developer, has created MarketBrowser.

The Intranet-based charting and graphing solution aims to help traders view and analyze market data from multiple sources simultaneously. The product integrates Reuters, Open Bloomberg, FAME, LIM and other major sources of real-time and historical financial-market data, as well as a wide selection of Internet and Intranet-delivered information.

"Different data formats and communications protocols across multiple market-data sources has often meant that traders, for example, either can't get the data they need, or require multiple terminals to display it," said Jay Smith, chairman of Leading Market Technologies. "Even then, they can't combine data into the same application. MarketBrowser solves these problems."

In addition to its information-sorting capabilities, MarketBrowser provides an on -screen button bar to allow quick changing of the symbol or periodiciy of any chart. The software also includes facilities for drawing trend lines, annotating charts and printing. Users can cut and paste MarketBrowser charts and graphs to Microsoft Office and other PC applications for use in client reports and other documents.

Knight Securities, a Jersey City-based Nasdaq wholesaler, is a MarketBrowser user. "We bought MarketBrowser because we didn't want to depend on a data vendor for our charting and analytics," said Kenneth Pasternak, Knight's president and chief executive. "With MarketBrowser, we get an outstanding graphical display of market data and the ability to choose whatever data sources we want."

Intelligent Agents

Intranet-linked workstations can also take advantage of powerful software search tools, known as intelligent agents. Intelligent agents are self-contained programs that can be tailored by users seeking specific types of information.

Data Grabber, an intelligent-agent program from Cyber Vista (www.cybervista.com), allows traders to automatically harvest data from an array of online sources, including information services and web sites.

A trader could, for example, instruct Data Grabber to capture stock-quote information at designated times, and have the data automatically placed into a spreadsheet for analysis. The software can also be used to monitor web sites for product announcements, financial statements and other types of breaking information.

Nicholas Roche, vice president of sales and marketing for San Mateo, Calif.-based CyberVista, said Data Grabber can help traders quickly zero-in on key information. "Data Grabber acts like a silent assistant, collecting information and allowing traders to follow all markets 24 hours a day," he said.

Roche noted that the software can even alert a trader to breaking information while away from the desktop. "Data Grabber can be linked to a user's e-mail, alphanumeric pager and fax machine to deliver information anytime, anywhere," he said.

Streaming Media

Another powerful Internet and Intranet-oriented technology that will likely impact traders in the years ahead is streaming-media technology, which delivers live or pre-recorded video and audio programming directly to the desktop. Streaming media is already available to firms with networked trading floors.

Mountain View, Calif.-based Starlight Networks, for example, offers StarCast, a streaming-media product that provides live and on-demand video and slide presentations within a standard web browser.

James Long, Starlight's chairman and co-founder, said potential StarCast applications include company announcements, corporate presentations and training seminars. "It really opens the world to traders," Long said.

"A trader can get video in a window on his desktop. He can correlate the information he's getting from the video feed to market information he's looking at concurrently," he added.

According to Long, brokerage giant Salomon Smith Barney was the first major financial-services company to embrace StarCast. The company deployed the technology on its 11,000-user corporate network last fall.

"Smith Barney uses the technology to broadcast live analyst briefings to desktops at its New York headquarters and in 470 branches nationwide," he explained.

Small Firms Lead

A few major firms, such as Salomon Smith Barney and Merrill Lynch & Co., have already begun installing Intranets, primarily as a low-cost way of linking together globally-dispersed employees.

But smaller firms will likely lead the industry's move toward Intranets. "Small companies can move faster because they don't have as many desktops to convert," said Rob Enderle, a senior analyst at Giga Information Group, a technology research firm based in Santa Clara, Calif. "Also, small companies don't have the financial investment in big, iron desktops like the major firms, so it's easier for them to make the decision to move to the new technology."

While Intranet technology has been available for several years, system security worries have slowed the technology's arrival on the trading floor.

"People have the feeling that anything that connects into any part of the Internet is a security risk," Tabb said. But firewalls, hardware and software combinations that prevent unauthorized data streams from entering an Intranet have become sophisticated enough to thwart the skills of even the most skilled hackers, he noted. "Intranets are really quite safe," Tabb added.

But it will still be a few years before the industry begins to widely embrace Intranets. Most firms are taking a wait-and-see approach, Tabb said. "Intranet distribution is still quite new, and most trading-floor managers are waiting to see how the technology evolves," he added. "No one wants to be among the first on the bandwagon."