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push their way. They also counted on the NASD to enforce the rules in their favor. Rid the dissenter from the industry, and you rid the industry of the problem. |
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The Market Markers Wanted To End SOES And DAET |
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It is a shock to the market makers that DAET trading is still alive and well. |
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John L. Watson III, who retired on January 12, 1996, as the president of the Security Traders Association (STA), had championed the fight against SOES and was one of the greatest anti-SOESites in history. In his final remarks to the industry, he acknowledged that the most grievous disappointment of his reign was that SOES was still alive. In his final President's Report, dated MarchApril 1996, he states: |
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Our [John seems to speak of himself in the royal first person plural like the Queen of England when she says, ''We are not amused," or perhaps he personifies the STA] single largest disappointment was our inability to effect changes to the Nasdaq's Small Order Execution System. We spent more time on this than any other single matter but always came up on the short side. Hopefully in a few months new systems will provide the needed relief to our institution and retail customers and to our firms. |
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It is inconceivable that the major concern of the market-making industry was the destruction of SOES. After all, we had been in the midst of the greatest bull market in history and market maker profits were at record levels. Think about all the pressing issues involved in the worldwide trading markets. It is irrational and illogical that the main concern of the securities industry was to kill SOES, its own and only efficient order entry system for the small investor. |
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Look at the market makers' position. The retiring head of the STA claimed that his biggest disappointment was that he couldn't destroy SOES, a NASD-created system that allows any person to execute a maximum 1000-share order. In reality, DAET/SOES trading hit the market makers and the brokerage |
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