Matthew Andresen

President, Island

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With strong views on the way in which securities are traded and never lost for words, the swashbuckling Matthew Andresen is charismatic and colourful. A talented fencer, he originally moved to New York to pursue fencing as a sporting career. Once in New York, with a national fencing title to his credit and an attempt at Olympic competition behind him, Andresen moved his attention to the financial world, spending five years as a trader.
Today, as president of Island he is more likely to be using his flying parries and lunges to level the playing Weld between the momentarily protected but vulnerable traditional stock exchanges and the highly ambitious electronic communication networks (ECNs).
In terms of trading volume, Island is one of the largest ECNs, trading in excess of 120 million shares each day. Andresen states that he is in the business of matching buyers and sellers and the essence of success is creating a liquid market. Functioning as an auction market, Island currently trades mainly Nasdaq securities and, like other ECNs, Island is waiting impatiently to cut a swathe through the New York Stock Exchange (NYSE). The logical next step for ECNs is to electronically trade NYSE securities and take on the NYSE head to head by becoming virtual stock exchanges. With a string of benefits such as cost efficiency, fairness, impartiality and speed, the ECNs are a force with which to be reckoned.
In what Andresen describes as a wickedly competitive market, Island and its closest rival, the Reuters Group's Instinet, account for 90% of the ECN market. Instinet, the only true ECN until 1997, focused on institutional investors. Island, however, also targets smaller broker dealers. 315 different brokerage firms trade securities through Island.

As a former day trader Andresen says he was frustrated with the level of service he received. An opportunity to do something about it arrived when he was asked to join Island by Josh Levine. Andresen says the internet has encouraged the retail market to become increasingly sophisticated.
He cites his mother as a good example, saying that over the last three years she has become a savvy investor and manager of her own portfolio accessing the latest research and information via the net. He predicts that this trend will continue and the retail market will be asking "what happens to my order after I place it?"
On June 28 1999, Island filed an application with the SEC to become a virtual securities exchange. In the meantime however, another ECN, Archipelago, appears to have stepped ahead of the game by partnering with the Pacific Exchange. Time to draw those swords, gentlemen.

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Matthew Andresen

President, Island

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