All did you catch the article yesterday in WSJ about this NASDAQ press release.
NASD Announces Proposed New Nasdaq System Innovation for Investor Benefit
Washington, D.C.-Frank G. Zarb, Chairman, CEO and President of the National Association of Securities Dealers, Inc. (NASD) today announced an agreement in principle between The Nasdaq Stock MarketSM and OptiMarkTM Technologies, Inc. which would offer investors and market makers access to a new and innovative trading technology.
Integrating OptiMark'sTM technology into the Nasdaq market would continue Nasdaq's effort to improve the opportunities for investors to receive the best available price in the marketplace, reduce broker/dealer trading costs and enable them to better serve their customers. By providing access through the Nasdaq network, small broker/ dealers, who otherwise would be unable to access OptiMark, will be able to give customers new execution opportunities. As a result of these steps, companies will also benefit through enhanced liquidity and flexibility offered to their shareholders. The preliminary agreement with OptiMark follows other recent initiatives by Nasdaq to improve its market, including its proposal to implement an integrated order delivery and execution system and a voluntary consolidated limit order file. In combination, these initiatives are designed to increase investor access to the Nasdaq market, reduce market maker costs and enhance market liquidity.
OptiMark is an electronic equity trading process which offers investors a "third dimension" to their trading criteria. Instead of entering orders at only one price and size, investors would be able to indicate, across a range of prices and sizes, their satisfaction to trade. Using powerful supercomputers and patented algorithms, the system matches profiles of buying and selling desires in a manner that maximizes the mutual satisfaction of all buy and sell interests. If final agreement is reached and approved by the NASD and OptiMark boards, this would mark the first application of this innovative technology by a primary U.S. market.
Incorporating this technology into the Nasdaq Stock Market would benefit investors by increasing access to a broader range of trading interest and by lowering costs. Investors would benefit through an opportunity to interact with other investors' orders in a low market-impact environment. NASD members would benefit from this agreement by having direct access-at a discounted price-to a sophisticated and innovative system for trading Nasdaq securities.
OptiMark technology will be incorporated into Nasdaq in two ways. First, broker/dealers will be able to route investor and their own proprietary orders through their Nasdaq Workstations directly into the OptiMark technology. Second, Nasdaq will directly link its proposed limit order file with the OptiMark technology, allowing investors' orders to participate in OptiMark matches, while their orders continue to be exposed in the file to all trading interest in the Nasdaq market.
Under the preliminary agreement, The Nasdaq Stock Market, Inc., would obtain an ownership interest through warrants in OptiMark Technologies, Inc. Over the coming weeks, the NASD will work closely with its Board, appropriate Board committees and OptiMark to finalize details of the agreement and specify how the system will integrate this kind of leading-edge technology into the Nasdaq market.
"Incorporating this kind of leading-edge technology into the Nasdaq market reinforces our commitment to shaping the new world of investing by providing access to low-cost, innovative trading mechanisms," said Zarb.
"For investors, market quality means the best possible price at the lowest possible costs-this is achieved by connecting trading interest and creating liquidity. Nasdaq is taking the next step to improve its market by integrating this innovative technology," said Alfred R. Berkeley III, President of the Nasdaq Stock Market, Inc.
"We are honored by Nasdaq's decision to incorporate this advanced trading technology in its market structure," said William A. Lupien, Chairman and CEO of OptiMark Technologies. "The OptiMark system will provide Nasdaq investors an enhanced mechanism for executing their trades."
Founded by former securities trader Bill Lupien and Dr. Terry Rickard, OptiMark Technologies, Inc., headquartered in Durango, Colorado, is the creator of the OptiMark System. OptiMark was developed by experts in electronic trading after extensive consultation with institutional investors, brokers, and exchanges. For more information on OptiMark Technologies, see www.OptiMark.com.
The Nasdaq Stock Market is the fastest growing stock market in the United States and the world's largest screen-based market. The Nasdaq Stock Market, Inc. is a subsidiary of the NASD, the largest securities industry self-regulatory organization in the United States. For additional information on NASD or Nasdaq, visit www.nasd.com and www.nasdaq.com, respectively. All briefing materials related to this announcement are available on www.nasdaqnews.com. |
