The Securities Exchange Commission decided to allow the Midwest Stock exchange to trade 25 stocks currently listed on the National Securities Dealers Association Automated Quotation NASDAQ system. The SECs unanimous decision granting so-called unlisted trading privileges to the 25 NASDAQ securities will allow the Midwest Exchange to begin trading the issues by May 18 under a one-year pilot program. Unlisted trading privileges allow trading of stocks on an exchange other than the one on which the stocks are listed. Before it would approve the Midwest Exchange request for the unlisted trading privileges the SEC had insisted that it and the National Association of Securities Dealers NASD come up with a way of reporting and combining information on stock prices and transactions. SEC officials said they needed to be assured that information on the trading in and price of the securities would be in one place for accuracy and consistency. But since the exchanges still have not come with a master plan the SEC approved an interim plan under which NASDAQ terminals would be put on the Midwest Exchange floor. All trades in the 25 over the counter securities done on the Midewest Exchange will be quoted in the NASDAQ system as well as on the Midwest Exchange under the interim plan. The NASD Midwest Exchange and several other exchanges have said they are working on a master plan for consolidating the reporting of price quotes and other information on stocks now traded on NASDAQ and listed on one or more exchanges. But an SEC official said such a new master reporting system is not expected to be in place until early next year. The Midwest Exchange proposed the interim reporting plan so that it can begin unlisted trading immediately he said. The 25 securities to be traded on the Midwest Exchange are the first over the counter securities to be traded on any exchange besides the NASDAQ. Some issues listed on exchanges however are traded on the NASDAQ. The 25 securities had an average dollar volume last year of 2.4 billion dlrs and made up 18 pct of the dollar volume of all the securities quoted on the NASDs National Market System. SEC officials said they would review the pilot program in about a year. It was intended to spur more competition in the securities industry.
SEC OKAYS MIDWEST STOCK TRADING OF OTC ISSUES