Nasdaq seeks link with London, German SEs
By Elizabeth Smith
NEW YORK: The parent of the Nasdaq wants to link its electronic marketplace
with the leading German bourse and the London Stock Exchange (LSE), which
themselves are in the final stages of a drawn-out merger process, say people
familiar with the matter.
The plan to link into the market created from the merger of the Deutsche
Borse and LSE would give Nasdaq a gateway into trading European stocks in a
well-established, competitive marketplace.
The National Association of Securities Dealers (NASD), Nasdaq's parent,
would still press forward with its own plan to build a sibling electronic
market in Europe, but this linkage would enhance its ability to gain access
to issues that trade on two of Europe's biggest stock markets, sources said.
The Deutsche Borse, formally known as the Frankfurt Stock Exchange, runs
Germany's main stock market and the world's No. 1 derivatives exchange.
NASD and Nasdaq officials declined to comment on the possible linkage, but
sources close to the matter say NASD has been in talks with the two
exchanges for some time. The main holdup is that those two markets are
trying to hash out a merger agreement of their own, the sources said.
The Deutsche Borse and LSE have entered a make-or-break stage this week, as
the Frankfurt exchange operator insists on a conclusion well ahead of its
May 4 shareholder meeting. If no merger is agreed to by then, the Borse will
press ahead with plans to float itself as a publicly traded company.
The Nasdaq, the No. 2 US stock market, grabbed headlines last year when it
announced it would build sibling markets in Japan and Europe. The idea
behind the expansion is to erect a global electronic stock market that would
trade the world's most liquid stocks 24 hours a day, seven days a week.
The Nasdaq recently struck a deal to make its market in Japan a unit of the
Osaka Stock Exchange. Nasdaq's partner in its Japanese venture is Internet
investment company Softbank Corp. In addition to Softbank, Nasdaq's partners
in its European venture are Australian media giant News Corp and the venture
capital arm of France's Vivendi.
Nasdaq plans to base its Nasdaq Europe in London, but it would be open to
all European companies interested in listing on the technology-heavy market.
Nasdaq is planning to launch its Japanese market by the end of this year and
the European counterpart in early 2001. (Reuters)
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