It's a nightmarish concept. I'm pleased to note that a number of the largest ECN's (two of which you mentioned) have posted and/or expressed viewpoints clearly stating that they are against this "SuperMontage" or Central Limit Order Book ("CLOB") concept.
I heartily agree: in my opinion, it's an anemic, monopolist concept that works against the goals of competition, as competitive trading forces (ECN's, market makers, etc.) in the CLOB scenario are forced to consolidate their quotes within the NASDAQ - or some newly-appointed, central market - framework.
I would prefer, and support, an OTC market system whereby all systems are separate but linked, such that an order entered into any system - NASDAQ, some ECN, an ATS, etc. - would automatically be routed to the best price available, even (and especially) if in some other repository of liquidity. Limit orders would stay on the book they are entered on, timestamped against all other limit orders on all other market participants' books at that specific price, until the market of such price is reached anywhere, at which point the order would (or could) be executed against by other participants.
In other words, I'd vote to keep the liquidity and best execution interactive, while protecting anonymity and avoiding some central power which might inadvertently dampen competitive forces. It would "act" like, but not look like, the proposed SuperMontage.
LPS5 |
