The new exchange, Nasdaq-Europe, aims to corner the market in initial public offerings of European high-tech companies. It will also offer European investors the chance to use pounds or euros to buy shares in some of the world's largest technology companies such as Microsoft and Intel.
The National Association of Securities Dealers (NASD), which owns Nasdaq in the US, has secured the backing of Rupert Murdoch and Masayoshi Son, the Internet pioneer, for the venture.
The NASD will be the managing shareholder, with epartners, News Corporation's new media fund, as a founder shareholder. Vivendi, the French utility, and Softbank, the Japanese Internet firm, are also founder shareholders. NASD is in advanced discussions to bring on board as many as 15 major investment banks, it said.
Nasdaq's announcement came a day after the London Stock Exchange launched techMARK, a separate index for high-tech companies.
In addition, Nasdaq-Europe poses a threat to the eight-strong alliance of European stock exchanges headed by the London Stock Exchange (LSE) and the Deutsche Boerse, due to be launched next year. It will also compete with Easdaq, its Brussels-based rival in which it has a minority stake, and with Euro NM, another European growth stock market.
But Frank Zarb, NASD's chairman and chief executive, said he was seeking partnerships with such institutions and had already talked to all of Europe's stock markets. "I want to emphasise the ecumenical spirit with which we approach this. We should not be considered a threat. Share and be shared with is our principle, as against the existing approach of `Bring us your IPO and we will trap the trade flow in our building'. There's logic for institutions and us to interconnect so we exploit their networks." He said a union with Easdaq would make sense.
The LSE said Nasdaq's arrival in Europe was interesting. "We have significant work in progress with other European exchanges. We anticipate that our good relationship with Nasdaq will continue," it said.
Clive Pedder, spokesman for Easdaq, said: "It sounds like Nasdaq is very happy to talk to partners as long as it is the managing partner. We have a year's head-start on them and we already have the backing of some very big names."
Euro NM, the umbrella group of European growth company stock markets, said: "It is expected. We will benefit from having started a market earlier."
In June Nasdaq unveiled plans to set up an exchange in Tokyo, Nasdaq- Asia. By creating a third exchange in Europe, Nasdaq intends to create interconnected markets accessible to brokers 24-hours a day. The infrastructure should be ready within 12 months.
Trading on Nasdaq-Europe will involve both traditional market makers and an electronic order book. The system will use the Internet, but retail investors will be unable to trade online and will continue to go through existing stockbrokers.
It will list the FTSE EuroTop 300 along with US and Asian stocks. The Financial Services Authority will be the principal regulator, though the exchange will have to accommodate particular national rules.Reuse content