Electronic Networks Announce Merger Plan

The expected consolidation wave may have begun among small electronic networks that are competing aggressively for stock trades with the New York Stock Exchange and Nasdaq Stock Market.

Brass Utility and Strike Technologies signed a letter of intent to merge their networks, a Strike spokesman said.

The merger would combine two small networks with powerful investors. Strike, owned by Bear Stearns Cos., Salomon Smith Barney and others, typically handles about 7 million shares a day, the company says.

Brass, nicknamed Brut and backed by, among others, Merrill Lynch & Co. and Goldman Sachs Group, claims average daily volume of 60 million shares.

“Neither one has made a huge volume impact, but both have a lot of potential,” said David Whitcomb, head of Automated Trading Desk, a proprietary trading firm.

When combined, the as-yet unnamed network will be one of the largest, behind Reuters’ Instinet system, which handles about 340 million shares a day, and Island, which handles about 100 million.