SHORT STORIES

July 6th TST incorrectly described corporate relationship of Securities Trading Systems Inc. and RMJ Securities, Inc. Both are subsidiaries of Exco International PLC and operate at arm's length. STS TIPS system will not offer RMJ's treasury ticker to customers other than reporting government securities dealers.

British Telecom's City Business Products unit is developing video switch to manage market data feeds, move that will put it head-to-head with systems integrators like Rich Inc. and Micrognosis Inc. City Business Products manufactures interchangeable telephone turrets for trading rooms. Although BT wants to manage information feeds for trader's desk, it is not interested in selling display hardware for data. Initial testing for BT's switch will occur in U.K. and is expected to be completed within year. Once video switch has been launched, British Telecom plans to introduce additional products to handle digital transmission.

Foreign exchange desk of Federal Reserve Bank of New York has installed direct lines to several currency brokers, indication that Fed will assume more active posture in currency market intervention. Telephone access to trading desks will improve Fed's market monitoring and effectiveness of intervention. Until recently Fed currency desk, which performs forex trading and market intervention for U.S. government, limited direct access and currency dealings to about 30 commercial banks. Direct links to broker desks will provide Fed with faster price reporting than quote services like Reuter Monitor or even screen-based services of brokers like US Brokers Inc. or Noonan Astley & Pearce Inc. Major brokers have direct lines to as many as 125 currency dealers. New broker contacts will give Fed more comprehensive currency market coverage than is available through lines to banks. Although Fed spokesman characterizes broker links purely as listening posts, brokers may unofficially serve as back channel for communicating Fed's intervention plans. Humans will be humans, and occasional leak to currency brokers might be effective way of broadcasting Fed's intentions to currency trading community. As many as six brokers are thought to be linked to Fed but only two, Noonan, Astley and Pearce Inc. and Tullett & Tokyo Inc., have identified themselves.

National Association of Securities Dealers may form automated market for trading non-registered securities similar to joint venture planned by American Stock Exchange and Quadrex Securities Corp. Quadrex is four-year-old investment banking firm specializing in bond trading and international transactions. In conjunction with Amex, Quadrex wants to develop electronic exchange to trade foreign debt and equity issues that haven't been registered with SEC. NASD's proposed market would be based on NASDAQ and allow foreign companies issuing securities outside U.S. to sell them to U.S. institutional investors. If Amex/Quadrex plan is approved by SEC, look for NASD to take run at trading non-registered securities of domestic and foreign companies. "This is something we could do very easily," says NASD source. "It would be a lot easier for us to implement than for Amex and Quadrex." NASD official says electronic marketplace for non-registered securities would be separate from NASDAQ system and open only to institutions. "If this kind of market looks likes it's going to fly, we're not going to sit back and let somebody else do it," says OTC broker/dealer who asks to remain unidentified.

International Stock Exchange of London plans to begin trading American Depository Receipts on British shares on its Stock Exchange Automated Quotation system next month. Dollar-denominated quotes for ADRs will be displayed on terminals receiving SEAQ service next to sterling prices for underlying British equities. By disseminating ADR prices on SEAQ, ISE hopes to recapture volume that has hopped to other side of Atlantic. For widely-held U.K. issues such as Glaxo PLC, more trading occurs in ADRs than in underlying shares. SEAQ quotes will allow ADRs, which represent foreign shares held on deposit, to be traded more easily in London before U.S. securities markets open.