FOR IMMEDIATE RELEASE                             2001-122


 SEC APPROVES PROPOSAL TO ESTABLISH THE ARCHIPELAGO EXCHANGE AS
   THE EQUITIES TRADING FACILITY OF THE PACIFIC EXCHANGE, INC.

             The PCX's Archipelago Exchange Becomes
     the First Fully Electronic National Securities Exchange
            for Trading Equity Securities since 1976

     Washington, DC, October 25, 2001 – The Securities and
Exchange Commission today approved the proposal of the Pacific
Exchange, Inc. (PCX) to establish the Archipelago Exchange
(ArcaEx) as its new, electronic communications and trading
facility.  The all-electronic ArcaEx facility will operate in
place of the trading floor of the PCX's subsidiary, PCX Equities,
Inc., with ArcaEx market makers replacing the traditional floor
specialists.  The ArcaEx facility is the first fully electronic
national securities exchange for the trading of equity securities
since the Cincinnati Stock Exchange developed its trading system
in 1976.

     ArcaEx will feature three trading sessions each day: an
early trading session, a core trading session, and a late trading
session.  Members and other users of ArcaEx will submit orders to
an electronic file of orders, known as the Arca Book, where all
trades will be executed at prices equal to or better than the
national best bid or offer.

     The Archipelago Exchange LLC, a wholly owned subsidiary of
Archipelago Holdings LLC, owns and operates ArcaEx.  The PCX
currently has a 10% ownership interest in Archipelago Holdings.
As a self-regulatory organization under the Exchange Act, the PCX
is fully responsible for the trading that will take place through
ArcaEx and is obligated to conduct all necessary surveillance and
to maintain an audit trail of trading through ArcaEx.  In
addition, the PCX board must approve all rule changes relating to
ArcaEx.  Finally, the PCX and its ArcaEx facility are also
subject to the Commission's oversight and examination.




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