MARKET SAVVY : SAVVY CONFIDENTIAL: A Briefing for Investors : SEC Chairman Will Present Several Ideas

Securities and Exchange Commission Chairman Arthur Levitt may propose combining the brokerage-policing units of U.S. stock markets into a single organization separate from the exchanges, an SEC official said Tuesday.

Levitt plans in a New York speech Thursday to urge the established markets and new electronic trading networks to end growing fragmentation of stock quotes and prices by finding new ways to share this information, SEC market-regulation director Annette Nazareth said.

“These are ideas that have charm, that the industry sees the need for--but the devil will be in the details,” said Bernard L. Madoff, a New York broker-dealer who heads the trading committee of the Securities Industry Assn., a brokerage trade group.

Levitt also plans to prod New York Stock Exchange Chairman Richard Grasso to change the exchange’s Rule 390, which prevents many of the largest NYSE-listed stocks from being traded in other markets, Nazareth said.

Levitt has expressed concern about maintaining the independence of and adequate funding for self-regulatory operations at the NYSE and the National Assn. of Securities Dealers (which runs the Nasdaq market and American Stock Exchange) as they make plans to convert to publicly traded for-profit companies.