[Congressional Record Volume 142, Number 90 (Tuesday, June 18, 1996)]
[Extensions of Remarks]
[Pages E1103-E1104]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      TRIBUTE TO THYRA HODGE-SMITH

                                 ______


                         HON. VICTOR O. FRAZER

                         of the virgin islands

                    in the house of representatives

                         Tuesday, June 18, 1996

  Mr. FRAZER. Mr. Speaker, I rise to salute a long-term community 
activist in the Virgin Islands, Mrs. Thyra A. Hodge-Smith, and mourn 
her passing. Mrs. Hodge-Smith lived an active life until her death on 
June 6, 1996, at age 90.
  She had been a part of the Virgin Islands community band for over 50 
years and was an active participant of ```Carnival'' until she became 
ill. Mrs. Hodge-Smith believed that education was important therefore, 
late in life she received her masters' degree from the University of 
the Virgin Islands.
  A stalwart in the Republican Party, Mrs. Hodge-Smith was one of the 
first females in the Virgin Islands to generate change in her party. 
Mrs. Hodge-Smith will also be remembered for her numerous years of 
service in the government and in particularly for her work in the 
Department of Health.
  As a strong supporter of families, Mrs. Hodge-Smith was always 
willing to do anything to strengthen family ties. Her legacy will live 
forever because of the many lives that she influenced. She was an asset 
to the Virgin Islands and will be missed by everyone who knew her.

[[Page E1104]]



                  PREFERENCING ON SECURITIES EXCHANGES

                                 ______


                           HON. SUE W. KELLY

                              of new york

                    in the house of representatives

                         Tuesday, June 18, 1996

  Mrs. KELLY. Mr. Speaker, on May 9, 1996, 18 of my colleagues and I 
sent a letter to the SEC regarding that agency's recent approval of 
preferencing on the Cincinnati Stock Exchange or CSE. In the letter, we 
expressed concern that the SEC had acted precipitously to permit this 
questionable practice on a securities exchange without an adequate 
empirical or legal basis.
  Preferencing enables a broker-dealer to take the other side of its 
own customer orders, to the exclusion of other competing market 
interest. In practice, CSE operates as a pure dealer market, depriving 
customers of the opportunity for their orders to be executed against 
each other. The ability of customer to meet customer is one of the 
hallmarks of the agency auction system, and frequently results in 
improved prices. In spite of the central place that customer order 
interaction plays on a true exchange, the SEC's order approving 
preferencing on the CSE leaves unanswered many questions about the 
practice's effect on customers. For example, the order does not examine 
whether customers whose orders are preference on the CSE are receiving 
the best prices for their transactions. Given the excellent job that 
the SEC has done over the years in safeguarding customers and pressing 
for fair treatment of customer orders, it is indeed surprising that the 
order approving the CSE preferencing program does not address so basic 
an issue.
  Mr. Speaker, today we take up H.R. 3005, the Securities Amendments of 
1996. This legislation does not address the issue of preferencing but I 
understand that similar legislation in the other body may contain a 
provision directing the SEC to undertake a detailed study of 
preferencing on exchange markets. I believe that such a study could be 
most helpful in addressing, among other issues, the quality of customer 
executions on the CSE. I urge support for such a study in conference. 
If the study identifies no tangible benefits to investors and the 
capital formation from preferencing on exchanges, I would support 
action to ban this practice.

                          ____________________