According to James Yee, chief information officer of the Pacific Exchange (PCX), technology will bring two key benefits to an investor: a lower cost of transaction, and a transparent price-determination mechanism.

Mr Yee, who was CIO with Montgomery Securities (that was acquired by Nations Bank and then merged with Bank of America), brought about a technological revolution of sorts at the respectable but perceived as a rather dowdy securities firm. Valued around $200 million in 1995 when he joined it, Montgomery (now Bank of America Securities) was worth $1.2 billion at the point of being taken over.

``Technology was only part of it,'' Mr Yee shrugs modestly. However, it was indeed the tech transformation that helped Montgomery move from equities to high-yield products including bonds and derivatives making it attractive as a brokerage with multi-instrument skills to BankAm.

For an information management guy, he doesn't think technology is an issue when it comes to cross-border trading. ``The key issue will be the regulations laid down by market watchdogs in various markets,'' Mr Yee said, in a chat with The Financial Express.

The exchanges, now beginning to don a global image, have to deal with two aspects of trading - floor-based (which contributes significantly to the psychology of the investors and the market) and network-based or screen-based trading.

``While floor-based trading is an important part, technology is pushing network based trading forward much faster. Electronic cross/communication networks are fast becoming popular in the investor markets,'' he said.Pacific Exchange in line with this trend has formed an alliance with Archipelago which already has a good network-based trading arm, and will function as a facility of the Pacific Exchange.

``Our strategy is clearly to be ready with the next generation of technology driven services so that we can tap the market as it opens up,'' he added.Day trading has also had its fair share of impact on the investor community. While this might reduce the retail investors' dependence on brokers (eventually making them more like consultants), according to Mr Yee, this would result in brokers becoming an extension of the trading platform and the day-trader also joining the ranks of market-makers.

``Brokerages and market makers will have their place but they will need to move with the times and add value to the investor,'' he believes.

Scalable technologies are a key, and backend therefore is perhaps the most important factor of the lot. UNIX on the server side and NT for the client side functions are still the best bet, Mr Yee adds.

Pacific Exchange is all set to look for alliances with Indian stock exchanges. This is part of the plans to leverage the thrust in network-based trading for equities and options globally. Without disclosing much details, Mr Yee said the exchange was looking to create a market synergy for trading activities and was planning to tap the international trading markets. Plans are likely to be finalised by mid-2001.