NASD Opposes Big Board’s Plan to Open Earlier

The National Assn. of Securities Dealers’ board voted Tuesday to oppose a move by the New York Stock Exchange to open securities trading half an hour earlier than the current starting time of 9:30 a.m. Eastern time.

The vote by the NASD’s board of governors backs a campaign by San Francisco-based Montgomery Securities, the largest institutional broker in the West, to block the earlier opening. Montgomery and some other West Coast brokers say earlier trading will work to the detriment of West Coast customers and increase the brokerages’ costs without increasing business.

The Big Board has said the move to earlier trading is necessary to recapture business that is being lost to overseas markets, particularly the London Stock Exchange.

The NASD, which runs the NASDAQ trading system for over-the-counter stocks, said: “It was the sense of the board, based on discussions with NASD members across the country, that the half-hour earlier opening would reduce securities firms’ ability to advise customers regarding investment decisions prior to the opening of trading and increase costs without significant benefits to investors.”

The NASD said, however, that if “other major equity markets” decide to go ahead with the earlier opening, due to start in September, NASDAQ would open earlier too, “to avoid investor confusion.” NASDAQ’s trading hours now match the New York Stock Exchange’s--9:30 a.m. to 4 p.m Eastern time.

A New York Stock Exchange spokeswoman said the Big Board had no comment on the NASD’s opposition to earlier trading.

Jack G. Levin, managing director for legal affairs at Montgomery, said of the NASD announcement: “We’re thrilled. . . . It really recognizes that there is no demand for this, which is what we’ve been saying all along.”

Montgomery says it has obtained enough signatures on a petition to call a special meeting of NYSE members to vote on a constitutional amendment to give members, instead of NYSE directors, the right to change trading hours.

The petition, however, hasn’t yet been presented to the NYSE. Montgomery officials met earlier this week with NYSE Chairman William H. Donaldson and Vice Chairman Richard A. Grasso to discuss the proposed earlier opening. But Levin said he didn’t detect any weakening in NYSE’s resolve to open earlier.