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Computers enhance quotes for NASDAQ.


Companies in the securities trading industry, particularly in the private placement segment, need fast and accurate quotes.

This was the primary consideration at the NASDAQ electronic stock market when the PORTAL (Private Offerings and Reciprocal Trading through Automated Linkages) application was developed a few years back.

PORTAL is a computerized system aimed at brokers and institutions who want to trade unregistered stocks and bonds in the private market. It also accommodates trading in foreign securities.

The service was added to the NASDAQ system this summer, following approval by the Securities and Exchange Commission (SEC).

It is the first electronic private placement market.

Security Features

Users added to the network soley for PORTAL can access the application by dialing into a Microcom High Density Modem System (HDMS) 32-modem chasis, which acts as a security device.

"The users have to pass through two levels of security--first by the HDMS which will call them back, then a second password must be given to a Stratus computer to access PORTAL," says Gary DiNoia, programmer analyst at the NASDAQ computer center in Trumbull, Conn.

The remote dial-in and security features allow investors to access the service from their yachts or cars, using passwords and IDs.

The V.32 modems operate at up to 19.2 kb/s.

Existing NASDAQ users can access PORTAL through the NASDAQ network, where 4000 workstations are already linked to Tandem VXL mainframes.

The system uses two XA2000 Continuous Processing Systems from Stratus Computer of Marlboro, Mass.

A single-processor unit for production is in Trumbull.

A two-processor unit in Rockville, Md., handles development and disaster recovery.

Fault Tolerance

Transactions go to a Stratus mainframe from the Tandem mainframe via X.25 lines.

"The advantage of the XA2000 is that it is hardware fault tolerant," explains DiNoia. "It lets us develop quicker and still have fault tolerance. You don't have to write software to do it, the hardware takes care of it for you."

NASDAQ Assistant Director of Software Development Dan DiSisto says, "We have 100% hardware availability. The production system has not been down since it was acquired almost a year ago."

The only setback was a small problem with the development software, DiSisto adds. This involved an unexplained stop that has never recurred.

IBM PC compatibles use Stratus PC Connect-2 asynchronous terminal emulation software to access the PORTAL system.

Workstations on the NASDAQ network are linked to Unisys DCPs spread throughout the U.S.

DiNoia describes the process: "The workstation formats a message and the DCP knows to deliver it to the Stratus by that format."

Increased Speed

A hardware/software link, called the Netex HYPERchannel, talks to the host from the DCPs.

HYPERchannel helps NASDAQ increase overall network speed.

"We had 56 kb/s trunks between our FEPs (front-end processors)--which were Varian 77s (V77s) back then--connecting our host.

"Now we're running dual HYPERchannell links at 50 Mb/s, so we're a thousand times faster.

"Obviously," DiSisto says, "we don't get a thousand times the throughput, because we have blocking and other things going on.

"HYPERchannel is designed to be a bulk file transfer arrangement basically.

"So we had to do a lot of software to create a blocking routine and utilize that technique to produce the high-speed transfer for our terminal traffic.

"But there are other times when the network is slow when blocking does not occur and a timer is used to initiate the transfer."

Even this speed may not be enough to accommodate the transactions that take place during the busiest times of the day, DiSisto says.

Big Spenders

There are two ways to qualify for PORTAL:

* if you're an investor who's already invested at least $100 million.

* or if you're a buyer with at least $50 million invested.

Investors gain a complete range of trading functions, including issue launches, real-time price entry and retrieval, and order execution and confirmation.

Subscribers include Cresvale International Inc., The First Boston Corp., Goldman Sachs & Co., Herzog, Heine, Geduld Inc., Kleinwort Benson north America Inc., Shearson Lehman Hutton Inc., Deutsche Bank Capital Corp., and Salomon Brothers Inc.

The U.S. private placement market--where securities are issued and traded privately--grew rapidly in the last decade. In 1980, $15.7 billion in private placements represented 22% of total new financing, versus 78% public financing. In 1988, $200 billion in private placements represented 42% of all new financing, and public financing only 58%.

Other institutions, such as private pension funds, state and local retirement plans, state and local governments, bank trust departments and bank holding companies purchase 10-20% of the total private placements.

Together, an automated market and deregulation are expected to increase liquidity and spur growth in the private placement market.

NASDAQ expects to go international with PORTAL early in 1991, according to DiSisto.

With this, trading hours will be extended to accommodate the time difference in Europe and overseas.

"we've had PORTAL demos in foreign countries already, like in London and France," says DiNoia.

Other plans for PORTAL include adding direct leased lines into the Trumbull center.

"Some people are expecting to be logged on all day. If we use the security device to bring them into our system they're tying up phone lines all day," he explains.

"With leased lines, they can stay logged on all day without tying up the dial-access network," he says.
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Author:Kaminski, Bob
Publication:Communications News
Date:Dec 1, 1990
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