Computer trading

Press, 27 November 1986, Page 33

Computer trading

The New Zealand Exchange, unlike virtually all exchanges overseas, does not have a physical floor. Trading is carried out using computer terminals in each of its 17 trading members’ offices. The trading members, who are the joint shareholders in the exchange, are the only ones with the right to directly trade on the market through terminals.

The same terminals are used by most brokers to maintain client accounts, monitor client positions, and to produce documentary records of trades to send to clients. The use of the electronic exchange, which was developed by International Commodities Clearing House, Ltd, has permitted a wide geographic spread of trading members and very fast and accurate price dissemination at low cost. In addition to its 17 trading members, the New Zealand Futures Exchange has a number of affiliate members, some in New Zealand and some in the United Kingdom.

While affiliate members do not have the right to trade directly, but must place their orders through a trading member, their clients are, like those of trading members, protected by the exchange’s fidelity fund against de-

fault by the member. Not all affiliate members will deal on behalf of clients, however. Affiliate members also have a say in the running of the exchange by electing one member of its board of

directors. The other members of the board are elected by the trading members. From the Egden Wignell and Co. Futures, Ltd, manual written by Dr Brent Layton.