The Pacific Stock Exchange, the country's largest regional exchange, is considering comsolidating all of its trading and exchange facilities in one location, PSE president G. Robert Ackerman has disclosed.
The PSE, now has stock trading floors in both Los Angeles and San Francisco, trades options in San Francisco, and also splits clearing processing and administrative activities between the two cities. The exchange was the product of a 1957 merger. If formerly was called the Pacific Coast Stock Exchange.
Ackerman said the exchange's board soon will consider an amendment to the PSE constitution which would eliminate the requirement that separate trading floors be maintained in L.A. and San Francisco. Once approved, the amendment must be submitted to the membership for a vote.
On the matters, in an interview said Ackerman:
He understands 10 - Securities and Exchange Commission will approve trading in "put" options by the end of February.Each exchange will initially be allowed to trade puts on five of the option series in which it now offers calls. Even after approval by the commission, it will take 60 to 90 days to get put trading going.
The PSSE was in the red last year because of the start-up costs of its organized options trading. Aside from the options, however, the exchange had a profit of about $300,000 in 1976, but this was wiped out by the operating loss on options of $900,000. But Ackerman predicted both PSE options trading and the entire exchange will show a profit in 1977.
The current uncertainly over the make-up of the SEC - there is one vacancy and chairman Roderick M.Hills also has tendered his resignation - "could slow up" the development of a national market system. This would re regrettable, in Ackerman's view, because there is now "a lot of momentum going" to get the system completed.
The PSE expects its share of stock trading activity to double or triple once a central market is in place. In 1976, its share of consolidated tape trades averaged 4.86 per cent of all transactions, but this climbed steadily during the year.
He PSE president said chances were "very good" that the exchange's membership will approve an amendment to its constitution giving the board discretion to move for consolidation, even though a move two years ago to consolidate only the equilty trading floors was side-tracked.
Ackerman said the advantage of a consolidation move at this point involved more that just the economics and efficiencies of a single location. Consolidation also would allow the PSE to meld into the developing central market more easily.
"Trying t comply with the composite quote rule now is giving us fits," he said. "We are the only exchange to have competing market makers, but they are 400 miles apart," he added, noting the exchange was now functioning as two marketplaces.