Nasdaq Opens Boutique Exchange in Montreal

Tech-heavy exchange hopes to attract Canadian investors and high tech companies.

Published: 21-Nov-2000

MONTREAL, Nov 21 (Reuters) - The Nasdaq stock market set up a boutique exchange in Canada on Tuesday to give Canadian investors direct access to its U.S. marketplace and to extend its reach as it expands in North America, Europe and Japan.

The launch of Nasdaq Canada is also a direct challenge to Canada's major bourse, the Toronto Stock Exchange, which itself is forging links with stock markets in New York, Japan and Europe.

The full deployment of Nasdaq Canada should take between one and two years, Nasdaq officials said, cautioning that many details still need to be worked out on the technological and business sides.

"There are so many events that can either delay or speed it up, we try not to give specific dates," said Nasdaq chairman and chief executive Frank Zarb.

"You know it's a certainty, and you know within two years it will get done," he said.

The arrival of Nasdaq in Montreal is also a coup for the Quebec government, since the largely French-speaking province lost its only equities market when the Canadian stock exchanges reorganized their activities last year. The Montreal Exchange now handles futures, while Toronto has senior equities.

"The arrival of Nasdaq will enhance competition and liquidity of the markets," Quebec Minister of Finance Bernard Landry said, before ringing the opening bell of session on the Nasdaq with Quebec premier Lucien Bouchard.

Ten Canadian securities firms have signed up to get trading terminals allowing them to deal directly with the U.S. Nasdaq from their Montreal offices. Previously, a Canadian investor wanting to buy or sell stock on Nasdaq had to go through a Canadian broker who would send the order to its U.S. trading desk.

"It will make it much easier for Canadian investors and shareholders of Canadian companies to participate directly in Nasdaq," said the president of Nasdaq International, John Wall.

In a second phase, set for sometime next year, Nasdaq intends to allow Canadian companies to list exclusively on a Canadian version of Nasdaq. A third phase will link markets in the Americas with others in Europe and Asia.

The 10 Canadian securities firms now involved are: BMO Nesbitt Burns, Canaccord Capital, Casgrain & Company, CIBC WorldMarkets Corp., Desjardins Securities, NBC International Inc., Pictet Overseas, Scotia Capital Markets, TD Securities and Yorkton Capital.

Nasdaq has opened a small administrative office in Montreal with a staff of five.

There are 146 Canadian companies listed on Nasdaq in the United States, including 42 without a listing on any Canadian exchange. In the first nine months of 2000, Nasdaq's Canadian issues generated, on the average trading day, a volume worth $3.13 billion, the exchange said.

The Nasdaq Canada index, symbol CND, will allow it to track the market performance of its Canadian-listed stocks.

High-tech component maker JDS Uniphase is the largest Canadian company listed on Nasdaq, with a market capitalization of $63.6 billion as of last week, followed by network services provider 360networks at $11.5 billion, and fuel-cell maker Ballard Power Systems at $7.5 billion.

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