Nasdaq's SuperMontage must wait until October
(Adds Instinet quotes, adds details throughout)
NEW YORK, Sept 6 (Reuters) - The Nasdaq Stock Market must
wait until Oct. 11 to trade stocks in its new $100 million
upgraded trading platform after a competitor filed a regulatory
notice requesting time to link up to a competing system, the
Securities and Exchange Commission said on Friday.
Last month, the SEC gave the Nasdaq the green light for the
trading system, called SuperMontage. But it also gave Nasdaq
competitors until Friday to inform the commission that they
plan to use an alternate trading facility, instead of being
forced to use SuperMontage.
Electronic brokerage Instinet Group Inc.<INET.O> said it
informed the SEC late Friday that it plans to use an alternate
facility, meaning Nasdaq will have to wait until October to
fully launch the system instead of trading stocks immediately.
"Instinet is in favor of competition in the Nasdaq
marketplace and we believe that it's critical that there be an
alternative," said Deborah Mittelman, Instinet vice president
of equities strategies.
New York-based Instinet is majority owned by global news
and information company Reuters Group Plc. <RTR.L> <RTRSY.O>.
Nasdaq can only trade test securities on the trading
platform right now. The stock market has been doing so since
the end of July.
After the SEC's decision in August, Nasdaq said waiting a
few more weeks to trade real securities in SuperMontage would
not be a problem, although an SEC economist estimated the delay
would cost the stock market $500,000.
Since its proposal in 1999, SuperMontage has been opposed
by electronic communication networks, or ECNs like Instinet,
which electronically match buyers and sellers of stock
anonymously.
SuperMontage is expected to give investors easier access to
data about share prices and help Nasdaq to compete more
effectively with ECNS that now account for more than 40 percent
of Nasdaq trading.
ECNs, worried that SuperMontage would decrease their
business, asked the SEC to mandate an alternative display
facility, or ADF, where they could collect and post prices for
Nasdaq stocks without having to use SuperMontage.
Instinet said on Friday that it expects to use the ADF to
trade Nasdaq stocks and does not have any concerns that it will
be able to get the best execution for its clients using the
ADF.
((--Nicole Maestri, Wall Street Desk, 646 223-6173))
REUTERS
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