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September 30, 2002

Listed Big Boys at Risk From SuperMontage?

By John A. Byrne

Nasdaq has declared war on its listed stock competitors.

The campaign combines SuperMontage technology with huge discounts for those using Nasdaq's Computer Assisted Execution System (CAES).

"The hurdles are not that great," said Erich Buckenmaier, a director in the InterMarket, Nasdaq's service for trading listed stocks on CAES. "We'd like to offer trading in NYSE, Amex and Nasdaq stocks - side by side - on SuperMontage. It could be done in a year."

However, Nasdaq officials, at press time, stress that no decision has been made. Still, a campaign would boost Nasdaq as it struggles to offset steep losses caused by bear market conditions. Nasdaq has also been hurt by ECN competition.

SuperMontage, some Nasdaq officials hope, could recapture order flow poached by ECNs, while Nasdaq builds the technical apparatus necessary to take more listed stock trading away from the Big Board and the Amex. "We'd walk away from CAES and adapt SuperMontage processing," Buckenmaier said.

Meanwhile, Nasdaq is planning a new fee schedule - as well as liquidity rebates and charges - for its CAES executions: Charges will be reduced from 50 cents per share to $3 per 1,000 shares with a cap of $75 for block trades.