Four major financial services firms said they have signed an agreement to form a new electronic communications network for trading stocks. Spear, Leeds & Kellog; Fidelity Capital; Donaldson, Lufkin and Jenrette; and Charles Schwab Corp will join forces in a consortium that will be centered around Spear, Leeds’ existing RediBook ECN and will add the retail and institutional order flow and market-making activities of the other member firms.
The new entity will begin operations as soon as it receives the requisite regulatory approvals, although the companies involved could give no clear indication of when that might be. In the interim, the RediBook ECN will continue to be operated by Spear, Leeds & Kellog with the participation of the other three. RediBook also said it would extend it trading hours, effective October 11, from 8am to 10pm Eastern time. The four consortium members said they are independently developing plans to effectively use RediBook as a medium for after-hours trading.
RediBook also plans to offer subscribers access to prices available on other electronic trading systems as part of a recently-signed agreement. Last month, it linked up with several other ECNs – including Archipelago LLC, Instinet Corp and The Island ECN Inc – in a partnership to make trading information and orders more widely available to investors outside of traditional market hours. The Nasdaq market responded to the move by cutting prices for its SelectNet automated trading system.
