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Singer mulls market merger
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March 12, 1998: 4:31 p.m. ET
Calls Nasdaq-AMEX deal 'significant,' but sees little impact on investors
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NEW YORK (CNNfn) - A former attorney for both the American Stock Exchange and the Nasdaq called Thursday's news that the two markets may merge "a very significant movement in the history of the American stock market."
Bill Singer, currently a regulatory partner at the security industry law firm, Singer Frumento, told CNNfn's "In Play" the merger would have little immediate impact on investors, although it could face some regulatory hurdles.
Singer also discussed the differences between the two stock markets.
Here are excerpts from that interview.
VALARIE MORRIS, CNNfn ANCHOR, IN PLAY: We have so much to cover on this. First question, because individuals are saying "what does it mean to us," what could be the potential impact for the individual investor?
BILL SINGER, SINGER FRUMENTO: Well, the potential impact is basically that Nasdaq becomes bigger and becomes more important in your daily life. Right now, Nasdaq is a competitor of the American Stock Exchange and in effect the two will no longer be competitors. So I'm not certain that you will wake up tomorrow and you will see a palpable change, but this is a very significant movement in the history of the American stock market because for the first time, we have an exchange system that may in effect be taken over by an automated nonexchange system.
MORRIS: A lot of people are wondering what would it be like if in fact it goes through -- that tends to be the $64,000 question. What's your opinion?
SINGER: What it will probably look like, initially, will be two separate entities that look pretty much like they do today. And I suspect the American Stock Exchange will continue to operate as a floor, but a more computerized floor, and Nasdaq I don't suspect will change at all. So I think what you will see in some sense is a physical presence for Nasdaq, which really doesn't exist now. "Where is Nasdaq?" is a joke in the industry. It is nowhere. Where the American Stock Exchange is, however, is exactly on the floor exchange.
MORRIS: If we look at synergies, if you will, Nasdaq, has the perception -- true or false -- because of problems that it had with scandalous things of that nature, that perhaps it is not viewed by overseas companies as -- what? Comprehensive enough? Straightforward enough? Is it looked at as somewhat renegade? That is part of what this synergies could be if the two merged?
SINGER: Well, I am a nationally known critic of Nasdaq, not necessarily the AMEX. So I'm a bit biased. But the fact of the matter is that overseas markets do view Nasdaq as the Wild West. However, we know that most overseas markets are now adopting the Nasdaq market system. We don't tend to see new exchanges being created. We tend to see new forms of Nasdaq being created. So they don't necessarily like the way the system is run here. But they do tend to like the system.
MORRIS: When we look at the system, how much of this is technology driven? One analyst we spoke to earlier today said, yeah it is. I mean we've got to go from this auction floor kind of mentality to a more comprehensive technological approach?
SINGER: Valerie, the American Stock Exchange needs to automate. But the problem is that if you really understand Nasdaq, it is not so automated as people think. This is a Nasdaq system. I am market maker. You are market maker. I telephone you. So we have two human beings on other end of the telephone call. I don't consider that automation,. My joke about Nasdaq is it is like the Wizard of Oz. When you pull the curtain back, there's still an old man there with whistles and bells. So I think what we need to keep in mind is that Nasdaq is automated, but the majority of what makes Nasdaq work are human beings on two ends of the telephone. I don't know how we are going to splice that into the AMEX.
MORRIS: Are they going to face any regulatory concerns?
SINGER: I think a number of concerns, not least of which would be antitrust. 
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