Track Securities Corp., a Boca Raton, Fla.-based broker/dealer, has filed an application with the SEC and the National Association of Securities Dealers (NASD) to form an individual investor-oriented electronic communications network (ECN). At the same time, Track Securities is expected to be acquired by Track Data Corp.-a real-time market data and trading software supplier-next year.
Track Data director Jack Spiegelman currently owns Track Securities, which pays a licensing fee to use Track Data's myTrack online trading software. But Barry Hertz, president and CEO of Track Data, says that his company plans to purchase Track Securities "before the end of the second quarter" of next year. Such an acquisition, of course, would give Track Data control of the ECN, which will be registered as a broker/dealer and will operate from 8 a.m. to 8 p.m. EST.
The yet-to-be-named ECN-which will initially match buy and sell orders exclusively for Nasdaq stocks-will probably be jointly owned by Track Data and a group of minority investors. Noting that one of the reasons he wanted to launch an ECN is because such an entity would give Track the "ability to negotiate various alliances," Hertz says Track is "looking to share equity" in its trading network with Nasdaq market makers and Wall Street brokerage houses.