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Brokers differ on whether screen-based trading will end front-running

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WILL fully screen-based share trading end front-running? Yes, according to a number of leading stock brokers including William Phillips, managing director of Salomon Brothers Hong Kong.

But Paul Phenix, head of compliance at the exchange, says no.

The current trading system in Hong Kong involves a computer Automated Matching System which receives buy and sell orders punched in from the floor of the exchange.

The big brokerages with dealing rooms at the exchange, will receive their orders by telephone from clients and transfer them on to the floor, again by phone, where they are put into the system.

The orders put into the computer are matched on a first-in, first-out basis and trading is carried out as orders come in.

For the floor traders, this system produces all kinds of opportunities for graft.

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