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Nasdaq's Supermontage Joins the Great Game: No longer just a scorekeeper, a tra

Traders Magazine, January 2000

Peter Chapman

If all goes as planned, Nasdaq's new supermontage proposal will mark the first major restructuring of the Nasdaq market in its nearly 30-year history. The Nasdaq system will be transformed into a centralized electronic exchange not unlike an electronic communications network (ECN). Nasdaq will cease to be a mere facilitator of dealer-to-dealer trading and become an execution mechanism in its own right.

Currently, Nasdaq operates mostly on the sidelines, collecting and displaying quotations and providing systems that let market participants communicate with one another. Most trades are still executed by members and their systems against each other. If the SEC approves last October's proposal, Nasdaq will evolve from the chaperone at a high school dance to a new life as a matchmaker. But instead of young singles it will match orders with orders. It will stand in the middle of all trades, acting as a sort of gatekeeper or traffic cop.

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