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Nasdaq closer to IPO
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July 29, 1999: 5:37 p.m. ET
Second-largest U.S. exchange takes a step closer to a market listing
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NEW YORK (CNNfn) - The Nasdaq stock market took a step closer to flotation Thursday, when its owner adopted a number of measures to restructure the U.S. second-largest stock market, including preparations to change its ownership structure.
The board of the National Association of Securities Dealers did not commit to anything as specific as an initial public offering, but said the steps "would move [Nasdaq] closer to a broad stock-based structure."
The NASD authorized its staff to pursue a five-point plan to prepare for the restructuring of the market. This includes reaching "preliminary agreements on possible equity investments with key participants" as well as preparation to file for an IPO with the Securities and Exchange Commission.
The decision followed a 10-month evaluation by a special committee set up to evaluate ways of improving the market's competitive structure.
"We need to change our ownership structure to align the interests of the market with the interests of the market participants who bring it their business," NASD chairman and chief executive officer Frank G. Zarb said in a statement.
Today's move is the latest in a series of measures taken by stock exchanges around the world to prepare for the increase in competition. The disappearance of national barriers and the rise of electronic trading systems is pushing national exchanges to either cooperate or compete.
The New York Stock Exchange said last week it was considering becoming a publicly traded company.
Earlier Thursday, London and Frankfurt stock exchanges angrily refuted a report that a rift had developed in their talks of setting up a pan-European super exchange.
London also said Thursday it planned to adopt a new ownership structure but denied it was planning an IPO.
And on Tuesday, electronic stock-trading system Archipelago announced it is set to ask for regulatory approval to become a full-fledged stock exchange.
In a separate announcement, the NASD said it had passed a rule that would require firms that promote day-trading strategies to disclose to customers, prior to opening accounts, the risks associated with that type of trading.
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Nasdaq
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