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September 24, 2002 at 08:00 PM
WASHINGTON (HedgeWorld.com)–The Securities and Exchange Commission has effectively delayed the launch of Nasdaq’s SuperMontage until the middle of October, in order to avoid allowing Nasdaq an unfair competitive advantage over the electronic communications networks.
It was in January 2001 that the SEC approved Nasdaq’s proposal for SuperMontage; a new order display facility that would give market participants greater information, faster ways to trade, and a choice in how prices are accessed. But several market participants objected wondering if their participation in SuperMontage might in effect become mandatory, and they would thereby be required to subsidize a competitor. (The SEC conditioned its approval upon the implementation of an alternative display facility, or ADF. The ADF is the no-nonsense system, whereas the SuperMontage is the bells-and-whistles variant.)
Earlier this year, Nasdaq had thought it would launch SuperMontage on July 29. Some speculated that the competitive threat it would pose stimulated Instinet and Island to announce their merger plans in advance of that date.
As the July date approached, though, the SEC forced a delay, announcing that it would have to consider the “extent to which the preconditions” of the new system “have been satisfied.” It held an open meeting on this point Aug. 12, and announced a rule change Aug. 29.
