S.F. Brokerage to Fight Earlier Start on NYSE : Trading: Montgomery Securities calls the proposal for opening the Big Board half an hour sooner ‘intolerable’ and has begun a petition drive against the move.

In a sharp challenge to the globalization-minded New York Stock Exchange, San Francisco-based Montgomery Securities on Friday launched a rare effort to force the exchange to reverse its plan to open trading half an hour early.

Montgomery, the largest institutional broker in the West, said the Big Board’s decision to open trading at 9 a.m. Eastern time--6 a.m. in California--was “intolerable” and “inhumane” and would “in all likelihood result in the destruction of the NYSE West Coast trading desks.”

As a result, Montgomery is leading a petition drive to call a special meeting of exchange members to reverse the earlier hours, which were announced last week and would take effect Sept. 9.

Under NYSE rules, Montgomery is seeking signatures from 100 of the Big Board’s 1,366 seat holders to call the meeting. At that meeting, Montgomery would ask members to amend the NYSE’s constitution to fix the opening time at 9:30 a.m. Eastern time. Montgomery’s partners hold six seats on the exchange.

Some industry officials said Montgomery’s unusual open rebellion represents the first salvo in a war over trading hours between firms in the East and those in the rest of the country.

“It’s going to be a difficult battle,” said Jack Luikart, president of San Francisco-based Sutro & Co. “The East carries 60% of the weight here.”

But others predicted that Montgomery’s move would have wide appeal, especially among Wall Street’s rank and file. Even with the current 9:30 a.m. opening bell, many East Coast securities industry employees must report to work at 7 a.m. for morning sales and research meetings.

So “Montgomery is going to get a lot of support, and not only in the West,” said John Keefe, a brokerage analyst at Lipper Analytical Securities Corp. in New York.

“Montgomery should have no trouble getting 100 members to call for a meeting to at least air the question,” added Will Porter, over-the-counter trading chief at Cruttenden & Co. in Irvine. Porter predicted that the debate over trading hours will only intensify, as securities markets become more global and the world moves toward round-the-clock, auction-style trading.

Montgomery has made no secret of its displeasure with the Big Board’s decision, but plans for the petition drive took the Big Board by surprise. Sharon Gamsin, an exchange vice president, said it would be “inappropriate” to comment because the Big Board had not been officially notified of Montgomery’s move.

Gamsin said public calls by exchange members to amend the Big Board’s constitution were “unusual but not unprecedented.”

In announcing the decision last week, NYSE President Richard A. Grasso said exchange directors had considered, and rejected, objections from West Coast firms. Without disclosing the NYSE’s methodology, he said the exchange had consulted a wide cross-section of its constituents before making the decision.

Big board officials and their supporters said the move to open earlier was part of the overall plan to increase trading hours to win back stock trades that were being executed overseas when the exchange is closed. The U.S. Securities and Exchange Commission is also thought to favor longer U.S. trading hours, because it would bring more transactions under its purview.

But opponents of the earlier opening said they doubted that the Big Board’s move would recapture much volume from London, because many trades occur overseas to avoid U.S. trade reporting requirements.

“Extending the NYSE’s opening would favor large (New York) firms and further disadvantage numerous NYSE firms that do not have a New York trading desk,” said Thomas W. Weisel, Montgomery’s chairman and chief executive, in a letter sent to NYSE officials last month.

“Those seeking privacy for their trades or a market other than an auction market will go elsewhere to satisfy their needs, whether the NYSE is open or not,” he added.

The president of a New York-based investment advisory concern echoed Weisel’s argument and added that the NYSE “has lost sight of what they are here for. . . . They are the New York Stock Exchange. If they want to be the International Stock Exchange, let them change their name.”

The head trader at major money management firm in Los Angeles also decried the change, saying: “We could do the trading we need to do in three hours.”

In arguing against the earlier opening bell, Montgomery said it had surveyed its institutional clients and found 95% opposed to the NYSE’s plan. Montgomery also said the move would have especially adverse consequences for West Coast investors, who would be asleep, and West Coast companies, which would be closed, while trading took place.