The new service, which the No. 2 U.S. stock market plans to launch in April pending approval by the Securities and Exchanges Commission (search), appears part of a renewed push to compete more aggressively with the NYSE, its largest rival.
The Nasdaq said the new service will allow its customers to trade NYSE-listed securities by offering anonymous routing to the NYSE's electronic order handling service through its Brut router. The Nasdaq recently obtained a lease on the Big Board's floor for Brut, which it bought in May 2004.
"We are currently witnessing a shift to automated trading of exchange-listed securities away from manual, floor-based markets," Chris Concannon, executive vice president of Nasdaq's transaction services, said in a statement.
Richard Repetto, an analyst at Sandler O'Neill, said the Nasdaq "trades very few NYSE-listed stocks." He was skeptical about whether the new initiative would translate into an increase in revenues for the No. 2 market.
Nasdaq's announcement comes as regulators are weighing expansive changes to securities laws that are expected to benefit automated trading venues such as Nasdaq.
For more than a year, the market has been positioning itself to challenge the Big Board (search) on its own turf, but its initiatives have had limited success.
In 2004, the Nasdaq struck a deal with several NYSE-listed companies to dual-list on its market. But according to data provided by the NYSE, trading flows in those companies' stocks have continued to favor the exchange.