"There's no downside" from the banks' perspective in supporting the new crop of ECNs, Galper says.
Broadway and other firms use ECNs similar to but on a smaller scale than Reuters' Instinet.
ECNs, which argued that SuperMontage was designed explicitly to put them out of business.
ECNs pay brokers a kick-back of a few cents for every order sent their way.
ECONOMIST: America��s leading stock exchanges need modernisation
It also let private trading systems called ECNs (electronic communications networks) post their prices on the same system.
It never displays a bid or offer but uses a complicated pattern that is employed in dark pools, ECNs and exchanges.
Examples of some ECNs are Instinet, SelectNet, Island, Archipelago, Brut, and Bloomberg Tradebook.
Eighty percent of its volume changes hands directly across the Bats network, and the remainder is routed to other exchanges or ECNs.
In addition to investing aggressively in ECNs, Goldman also bought a 20% stake in online investment bank Wit Capital in March 1999.
Most stocks traded on ECNs are NASDAQ securities traded after NASDAQ closes.
ECNs, and might have an interest in switching their trading volume to a market in which they have a bigger ownership stake.
The ECNs are not the only organisations seeking reforms at the NYSE.
Within a few years Brut and other ECNs were stealing ever larger chunks of business from established exchanges by offering quicker, cheaper trades and innovative pricing.
BATS, for example, charges a flat fee of .0024 cents for removing liquidity and rebates .0022 cents for adding it (most ECNs have this type of pricing model).
Nasdaq claims to have pioneered the electronic trading model in the late 1970s, paving the way for the emergence of electronic communications networks, or ECNs, in the last decade.
Nasdaq and the ECNs may also see Mr Grasso's embarrassment as an opportunity to press their case that the NYSE is monopolistic and resorts to dubious tactics to preserve its pre-eminent position.
Today his private electronic stock exchange handles roughly 265 million shares per day and 10% to 15% of all Nasdaq-listed shares, a higher share than any other of the electronic communication networks (ECNs).
He is widely credited with having increased the number of international firms listing their stock on the NYSE and with seeing off the threat from Nasdaq and electronic trading networks (known as ECNs).
Millions of trades occur in over 50 different and unique dark pools, internalizers and ECNS (all of whom have different (undisclosed) operating and business models) and no one can determine which dark pool did the trade.
Bats has gone back to a fee structure that earns it a positive gross profit, but its spread of two-tenths of a penny per share is still far narrower than what Nasdaq, NYSE and other ECNs get.
Last month, before Mr Grasso's generous remuneration had been revealed, the heads of two ECNs hit back in public at boasts by Robert Britz, the NYSE's president, that alternative markets had managed to grab only a tiny fraction of the NYSE's trading.
In the past year nine ECNs (electronic communications networks) have sprung up to trade shares online. (E-Trade, Ameritrade and the like are more akin to brokerage firms.) Island ECN, backed merely by a phalanx of Dell PCs and a broker license, now clears 12% of Nasdaq's transactions.
He still owns 100% of Tradebot but no longer manages the firm. (He claims that Bats and Tradebot extend no preferential treatment to each other.) The acquisitions by Nasdaq erased two possible competitors, and soon after that Nasdaq eliminated the low fee structures at the ECNs that had once attracted broker-dealers.
In the past year nine ECNs (electronic communications networks) have sprung up to trade shares online. (E-Trade, Ameritrade and the like are more akin to brokerage firms.) Island ECN, backed merely by a phalanx of Dell PCs and a broker license, now clears one-quarter of Nasdaq's trades and 12% of the transactions.
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