More Competitive Marketplaces For NYSE And Nasdaq

Speech by SEC Commissioner:
Commissioner Annette L. Nazareth
U.S. Securities and Exchange Commission
New York, NY: September 22, 2005
 

Within weeks of the adoption of Regulation NMS, the NYSE announced its intention to merge with Archipelago and Nasdaq announced its intention to merge with Instinet. The driving force behind these mergers appears to be the prospect of building stronger, more diverse, and more competitive marketplaces. In each case, the parties expect to combine the best features of each other's market to improve liquidity and executions and, of course, profits. NYSE and Archipelago seek to position the new entity as the preeminent global marketplace for equities, options, and other derivatives, providing additional growth opportunities and more choice for investors. Similarly, with its acquisition of Instinet and, previously, Brut, Nasdaq seeks to significantly deepen Nasdaq's liquidity pool and avail itself of Inet's lower-cost, more efficient platform for the Nasdaq Market Center. Nasdaq's goal is to increase efficiency, liquidity, and the opportunity for an execution on a Nasdaq trading system. It hopes to attract new listings and expand choices for investors accessing the Nasdaq market.

The marketplace's competitive response was not limited to the NYSE and Nasdaq. We have also seen proposals by various regional exchanges that are designed to provide an alternative trading venue to the two dominant markets. There has even been discussion of the creation of one or more new ECNs