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Nasdaq opens to ECNs
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June 13, 2000: 3:39 p.m. ET
Bloomberg, MarketXT, BRUT to trade exchange-listed stocks on Nasdaq
By Staff Writer Antoinette Coulton
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NEW YORK (CNNfn) - Nasdaq said Tuesday that three electronic trading networks will use its system to quote and trade exchange-listed stocks, including those listed on the New York Stock Exchange.
Under the agreement, the networks - which also are called electronic communications networks, or ECNs -- Bloomberg Tradebook, BRUT and MarketXT, will post quotes and execute trades within the Nasdaq InterMarket, previously called the Third Market.
"Technology is the investor's friend and Nasdaq InterMarket is well positioned to lead the way," said Frank Zarb, chairman and CEO of the Nasdaq Stock Market.
Nasdaq said the agreement is intended to break down competitive barriers. ECNs currently account for 25 percent to 30 percent of the trading in Nasdaq stocks but only 5 percent of exchange-listed stocks.
 Two other electronic trading networks, Instinet and REDIBook, support the agreement but have not yet decided to participate in the project, Nasdaq said.
Another ECN, the Island Electronic Trading Network, also is watching the new proceedings but expressed dissatisfaction with the InterMarket Trading system (ITS), that enables traders at the nation's various exchanges to communicate with each other and, subsequently, trade stocks regardless of where the orders are placed.
"We are certainly watching in interest," Island general counsel Cameron Smith said. "But the SEC has said that the ITS system is antiquated and needs a complete restructuring."
The ITS system currently has a two minute delay for placing orders and a one minute response time to execute an order.
"The strength of Island is our technology," Smith said. Whether or not Island chooses to be a direct participant in Tuesday's announced project or stand alone, Smith said, the ITS has to be overhauled.
"ITS has its pluses and minuses, " Nasdaq InterMarket Managing Director Dean Furbush said. "It is a two-lane road, dirt in one direction and shiny asphalt in another, but it goes down far less than other systems and the main issue is the way orders are received at the other end."
Earlier this year, the Securities and Exchange Commission granted ECNs the right to sell exchange-listed stocks, and the New York Stock Exchange recently dropped rules that prevented trading in some NYSE-listed stocks outside of the exchange. 
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