Hybrid News

Following is an excerpt from what looks like an preliminary transcript of today’s LaBranche &amp Co. Inc.first-quarter earnings call:

Marc Sulam - Healy Circle: Michael three issues; I think the last quarter you touched upon some regulatory changes that may be impacting the specialist business, can you give us an update on where those are?

Michael LaBranche: [There] are current proposals in Washington to really get the traditional cash specialist business more in line with the current market structure. So there is talk of allowing the business to become more integrated with other parts of our business and that would be true for any of the specialists that have other trading businesses and that would be something that we would welcome. It makes a lot more sense and it really — in today’s world when you have multiple products, multiple venues, multiple pricing where market share has gone from 80% to, whatever it is, 30 something %.

It really makes sense to be able to integrate your businesses with your other market making features and so we think that there is going to be some relief with regards to that. There is talk about changing the specialist name to integrated market makers which would also reflect the changes that are necessary there. The reduction in NLA was a big change because it certainly with the way stocks trade today, you don’t need the same amount of capital there and it makes more sense to be able to use that in other places.

Those are big things that are making a difference in that business but they are not just making the difference, in that business they are making a difference to our overall business because we can now more affectively use out capital. We are no longer tied to having bonds with a negative carry, for example. Those are the big changes. Then the Rule 98 which is the Chinese wall rule would be an important thing for us.

Marc Sulam - Healy Circle: What do you think the timetable is on that Rule 98 issue?

Michael LaBranche: It’s for me to say that. I can tell you what I hope it would be, and I would hope it would be a matter of months, if not less but it’s not up to me to make that determination.

Original post by zach

This entry was posted on Tuesday, April 22nd, 2008 at 9:15 pm and is filed under Energy Prices. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.