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John Turney
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Foreign Exchange Infrastructure: Yesterday, Today and Tomorrow

In this exclusive to Traders Magazine, John Turney, Global Head of Outsourced FX at Northern Trust, discusses the evolution of the fx infrastructure and what is to come.

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July 15, 2007

Short Sale Change May Help Nasdaq

By Peter Chapman

Nasdaq expects to benefit from the Securities and Exchange Commission's elimination of the short sale price test rules.

Last month, the SEC struck from its rulebook and from that of any self-regulatory organization the tick tests for New York and American stock exchange securities and the bid test for Nasdaq securities. The move will enable Nasdaq to capture more trades, officials there say.

"The elimination of the short sale bid test is important for us," Chris Concannon, Nasdaq's head of transaction services, told reporters at a press briefing following the SEC's vote.

"We've seen some regulatory arbitrage around this rule where other markets aren't required to comply with the Nasdaq bid test. So when that rule goes effective, we will be on a level playing field with those markets." Since Nasdaq instituted the bid test in the 1990s, traders have been able to circumvent it by shorting stocks on Archipelago and other market centers.

Nasdaq also expects to see more short sales of listed names on its platform, as the rules for shorting all securities are now similar, Concannon added.