Comex called trading haven
Staloff charts exchange's course as its new president
NEW YORK--Arnold Staloff sat in his plush eight-floor office overlooking the world's busiest financial district and talked about the challenges he faces as the new president of the Commodity Exchange.
The 44-year-old Staloff has taken over the helm of Comex at a time when the futures industry is facing increased competition from foreign exchanges and tougher scrutiny from federal regulators.
Yet the man who began his financial career with the Securities and Exchange Commission speaks positively about the current movement toward stricter regulations, many of which stem from recent federal investigations into questionable trading practices.
"When you have a safe marketplace it's a good business practice," Staloff said in a recent interview. "Comex has to be known as the safest and fairest exchange in the world." Staloff said customers who trade in the futures market deserve the comfort of knowing that their transactions are being handled fairly and efficiently. He said he intends to cooperate fully with the Commodity Futures Trading Commission to ensure the safety of the marketplace.
Guiding the switch to a more precise, up-to-the-minute electronic trading system is another of Staloff's challenges. The former president of Philadelphia-based Financial Automation Corp. said such a move also would help "prove to the world that trading here is safe."
At the same time, Staloff stressed that "having a safe marketplace doesn't mean that other things have to wait."
While Staloff was a senior officer of the Philadelphia Stock Exchange and president of the Philadelphia Board of Trade, posts he held until coming to Comex Aug. 21, he directed the development of the Philadelphia exchange's options on foreign currencies.
His success in launching a new product in Philadelphia was cited by John Hanemann, former Comex chairman, as a key factor in being selected president. Staloff emphasized the need to expand Comex's product lines and services to make the exchange more competitive with the London Metal Exchange and other foreign exchanges.
He used the example of Comex's faltering aluminum contract as one area where the exchange could become more profitable by taking a more service-oriented approach.
"The differences between a successful product and a not-so-successful product is one or two major institutions trading the product," he said. "All markets are markets of people and my history is one of getting to know people."
Staloff said Comex has to make a greater effort to "personally help a customer where it's possible for the exchange to help. If an aluminum company is not trading on Comex and there's something I can do to help, I want to get involved."
He said he's prepared to bend over backward to give Comex customers special treatment and said he would personally intercede "when there's a dispute (between a customer and a broker) and the customer feels he's not getting the proper attention. If need be, I'll see that trades are adjusted to keep that person's allegiance."
Staloff also talked about the pressing need to find a more suitable location for New York's five commodity exchanges--Comex, New York Mercantile Exchange, New York Cotton Exchange, New York Futures Exchange and the Coffee, Sugar and Cocoa Exchange --and how the search for a new home might provide the impetus to unite the exchanges.
"I haven't heard one person say (a merger between the five exchanges) shouldn't happen," he said. "Maybe the move to a new location will help."
He said overcrowding on the trading floor is just one symptom of the many problems traders have at the present location in the World Trade Center. "Although the traders love what they do, the trading environment is not very conducive," Staloff said. "The air conditioning is not adequate and it brings down the overall morale and demeanor of the people who work there."
After talking about the many difficult challenges he faces in his new post, Staloff said he intends to attack each task simultaneously rather than adopt a step-by-step approach.
"I'm not the type of person to do things serially," he said. "I see Comex as being very conducive to new ideas and people are looking forward to me doing things. I'm not the type to sit around."
COPYRIGHT 1989 Reed Business Information
COPYRIGHT Gale Group
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