Fidelity Joins Electronic Exchange Partnership

Fidelity Investments - the country's leader in mutual fund management - is joining Lehman Brothers, Credit Suisse First Boston and CitiGroup to provide the equity necessary to form Boston Equities Exchange (BeX), a new electronic stock exchange. BeX will be operated by Boston Stock Exchange, a failing exchange that lost almost $2 million in just the past two years.

"This partnership brings together a unique combination of industry expertise and sophisticated technology that will provide our clients with automated tools and a cost structure that will enable us to meet the needs of retail and institutional investors, while managing financial and regulatory risk," said Mike Curran, chairman and CEO of the Boston Stock Exchange.

 The BSE takes care of less than 1% of the trading volume at the New York Stock Exchange, but the electronic platform will be able to best the trading costs of larger markets like NYSE.

The addition of the new exchange encourages competitive pricing and product innovation that benefits Fidelity and the other equity partners. "The creation of the BeX will provide greater choice and competition among markets, which is vital to keeping trading costs low and ensuring quality executions. This is in the best interests of our clients," said Mark Haggerty, executive vice president at Fidelity Brokerage.

It all began in November 2004, when Fidelity conducted a study that concluded that stock orders of fewer than 10,000 shares cost about 1% more on the trading floor at the NYSE than through an electronic exchange.