Harborside+ Survey of Block Traders Reveals a Dim View of Decimalization.

Business Editors

NEW YORK--(BUSINESS WIRE)--Aug. 18, 2003

Harborside+, the neutral and confidential large block trading service, announced today results of a recent survey conducted among large block institutional traders on the impact of decimalization.

"Decimalization is a topical issue we're interested in knowing more about from the perspective of our clients," said Harborside+ President and CEO, Robert C. Hall. Harborside+ opens up the greatest available pool of liquidity, by including traders from the buy- and sell-sides. To date, more than 450 institutional traders from the buy-and sell-sides have each submitted a minimum of five IOIs (indications of interest) to Harborside+.

Decimalization supplanted fraction-based trading, and was introduced to help narrow spreads and pass along cost savings to investors. The Harborside+ survey, sent via e-mail to 233 buy- and sell-side block traders, yielded the following responses to three questions:

Question 1: What impact do you think decimalization has on block

trading? (A) Net positive (B) Net negative

Result: Net positive - 16%

Net negative - 82%

(49 responses)

Question 2: How do you think decimalization should be addressed?

(A) Kept as is (B) Modified

Result: Kept as is - 20%

Modified - 78%

(49 responses)

Question 3: If you selected "Modified" in question 2, how should

the change take place? (A) Widen spreads for everyone (e.g., 0.05

increments) (B) Establish a minimum execution increment for blocks

(e.g., greater than 10,000 shares)

Result: Widen spreads for everyone - 95%

Establish a minimum execution increment for blocks - 5%

(39 responses)

"Our clients handle the execution of large block orders for money managers, many of whom run multi-billion dollar portfolios," said Harborside+ Chief Operating Officer, Michael Cashel. "These results suggest that decimal trading is still not broadly accepted among institutional block traders."

Harborside+ melds the best of technology and human intervention, so buyers and sellers can find each other and successfully complete a transaction quickly, efficiently and without market disruption. As part of its standard business practice of confidentiality, Harborside+ does not reveal customers, trades or volumes.

The Harborside+ trading desk notifies the buyer and seller when the system locates a match, and assists counterparties in finalizing the transaction through phone-based communication that keeps identities confidential. Trades are executed by Harborside Securities, a totally independent registered broker/dealer. A blended approach of technology and live support is deemed most effective for successfully trading large blocks, and especially in negotiating for larger sizes, accommodating conditional requirements and step-out trades. Harborside+ is not an ECN or ATS.

The technology underpinning Harborside+ is utilized as an enabler for pre-qualifying buyers and sellers of size. Traders submitting IOIs to Harborside+ only indicate side (buy or sell) and symbol. Unmatched IOIs are not seen by anyone, including the Harborside+ trading desk. IOIs may be sent to Harborside+ through a variety of channels including a firm's OMS, a Web-based GUI (developed by Harborside+), direct FIX connections, file uploads, or by phone to the Harborside+ agency desk.

For more information on Harborside+, visit www.harborsideplus.com.