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Nasdaq Europe sets launch
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November 5, 1999: 9:34 a.m. ET
U.S. exchange plans pan-European equity platform by end of 2000
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LONDON (CNNfn) - Nasdaq confirmed plans Friday to launch its own London-based pan-European trading system by the end of 2000, posing a challenge to regional exchanges.
Nasdaq's U.S. parent, the National Association of Securities Dealers, or NASD, is teaming up with Rupert Murdoch's epartners fund, Japan's Softbank and Viventures -- a fund controlled by France's Vivendi (PEX) -- to back the new exchange.
The venture seeks to provide a seamless trading platform for high-growth European companies that combines Nasdaq's Internet technology with a dealer-based trade system.
"In the U.S., Mr. and Mrs. Main Street have come to Wall Street, and we anticipate that this general trend will happen elsewhere around the globe," said Frank Zarb, the NASD's chief executive officer and chairman.
NASD chief Zarb: stitching markets together
Zarb is already collaborating with Softbank Corp.'s founder and CEO, Masayoshi Son, on a similar Internet-based stock market in Japan. Both men said Friday that the simultaneous creation of Nasdaq-Europe furthers their vision of an integrated global trading system in which shares trade around the clock and in several markets.
"An investor in Tokyo will be able to come onto the screen and buy a European company with instant liquidity," Zarb said. He expressed hope that a pan-European platform run by the world's largest electronic exchange will help erode political barriers that have hampered financial unions across Europe and in Asia.
Nasdaq's previous sortie into Europe, the Brussels-based joint venture Easdaq, failed to match the exchange's success in the United States, attracting just 51 listings.
Unlike the New York operation, the new London unit will be a hybrid of screen-based trading and market makers. It will be established in London and operate under the regulatory umbrella of the British Financial Services Authority.
About 15 British, continental European and American financial firms are expected to take equity stakes in the new venture; trading will begin in the fourth quarter of 2000.
Nasdaq Europe: millennial hopes
Nasdaq's success in attracting blue-chip technology stocks from around the world to its core U.S. exchange and luring investors to the sector has seen copy-cat exchanges spring up in Europe.
The London Stock Exchange launched its own Techmark trading system Thursday, comprising 181 British technology firms. Frankfurt's Neuer Markt has already established a reputation for initial offerings by smaller European technology companies.
Analysts said that the new Nasdaq venture will benefit from its solid brand recognition and international links. However, they noted that European exchanges are likely to accelerate their own alliance efforts to counter the threat before Nasdaq-Europe launches in the final quarter of next year.
Nasdaq and its partners plan to establish a 24-hour trading platform by eventually linking its global trading platforms.
"Nasdaq-Europe is an important step in creating an electronic global stock market for the benefit of companies and investors around the world," Zarb said Friday.
He sought to play down concerns that regulatory authorities in European countries outside the United Kingdom could prove a hindrance to seamless electronic trade execution.
"Hopefully, the politics of securing regulation will be pushed to more uniform standards," he said. "We hope that political barriers will be dropped."
Murdoch sees Europe growth
Rupert Murdoch, who addressed reporters in London Friday via a satellite link-up, said the Nasdaq's arrival in Europe would spur business growth in the region at a time when electronic trade is catching fire.
"Not all entrepreneurs are born in America," said the Australian-born Murdoch, who is an American citizen. "Europe is rapidly emerging as the next major focus for Internet expansion. The need for the kind of liquidity and efficiency that Nasdaq brings is needed even more on the Continent than it is here (in Britain)."
The number of online brokerage accounts in Britain, France and Germany -- the largest traders in the region -- is expected to soar to 2.5 million by the end of 2000 and more than 8 million by 2002, from a current 700,000, according to the Tower Group.
-- from staff and wire reports
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