What’s ahead

Ultimately, the exchange that grabs the pan-European and global limelight could be the one that maximizes the use of the Internet to reduce costs, facilitate fast access and provide information. An efficient ECN-like trading system will help. Merrill Lynch’s Tom Joyce, head of equity market structures, thinks that will be Tradepoint in Europe. If Tradepoint does not rise to the occasion, “it could at least be the stimulus for a pan-European consolidation” of markets, he notes.

Easdaq’s Pedder does not rule out consolidation, noting “there won’t be room for both Easdaq and Nasdaq in Europe.” Despite an almost complete parting of ways, Easdaq and Nasdaq remain friends, and a merger or acquisition is not out of the question, he says. Easdaq even plans to go public itself by the end of next year on Nasdaq — and then on its own exchange, he adds.

In Frankfurt, Nagel might have something to say about consolidation. Yes, he says, Neuer Markt has been talking to Nasdaq. But Neuer Markt is already an efficient exchange that draws on the Deutsche Borse’s Xetra electronic system. With 10 percent of Neuer Markt’s listing companies and 20 percent of its investing already coming from outside Germany, why shouldn’t Neuer Markt emerge as the new, international Nasdaq? Nagel, never one to sit still, expects Neuer Markt to continue to expand while Nasdaq copes with a multitude of challenges, including coming to terms with the vicissitudes of European cultures, and figuring out how to run an efficient, electronic operation.

No matter who takes the global exchange mantel, no one expects local or national exchanges to dry up. “An English brewery in the darkest corner of Kent does have the right to capital, but they’ll get it from a smaller exchange,” says Pedder. Nor do exchange chiefs, for all their liquidity-seeking zeal, expect markets to buzz 24 hours a day. “Greed is a driving force of our business, but it all has its limits,” says Nagel. “People have to sleep.” If Nagel sits still for a second perhaps he, too, will get some shut eye. But Nasdaq better not count on it.

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