New President at Pacific Stock Exchange

Herbert G. Kawahara, formerly E. F. Hutton’s top executive in Southern California, has been named president of the Pacific Stock Exchange.

Kawahara, 58, will assume the post on Monday, replacing James S. Gallagher, whose previously announced resignation takes effect Jan. 19.

As president, Kawahara will be responsible for managing the exchange’s trading operations at a time of unprecedented technological change in computerized-trading systems. The exchange, which operates equity-trading floors in Los Angeles and San Francisco and an options floor in San Francisco, also faces intensifying competition for new listings and trading volume with other exchanges and with the over-the-counter market run by the National Assn. of Securities Dealers.

“My challenge will be one of managing the resources and the change that’s going on in all markets,” Kawahara said in an interview. He said the exchange would not reach the size of the major exchanges in New York, Tokyo and London but “can be a niche player” that can be on the leading edge of technological innovation because its relatively small size makes it easier to implement change.

Kawahara is no stranger to the exchange and its policy-making apparatus. A member of the exchange’s board of governors since 1981 and vice chairman in 1985, he also served as chairman of the search committee last year that selected the exchange’s current chairman and chief executive, Maurice Mann.

Kawahara served as head of E. F. Hutton’s retail brokerage operations in Southern California until last year, when he was appointed an executive vice president for corporate marketing and strategic planning. He said he was approached about the Pacific Stock Exchange presidency before Hutton put itself up for sale and agreed to merge with Shearson Lehman Bros., but the Shearson deal “made my decision to accept the job easier.”