Nasdaq Stock Market Inc. has formed a joint venture with an Indian software developer to create Internet-based trading systems aimed at supporting Nasdaq-Japan and Nasdaq-Europe when those electronic markets go live in 2001.
The joint company, called IndigoMarkets, will be supported by SSI Technologies in Chennai, India. The company is developing a back-office Internet-based trading environment that will run on a Tandem Computers Inc. mainframe environment in both Japan and the U.K. In addition, IndigoMarkets will develop and sell Internet-based trading software designed for Japanese and European investors to trade Nasdaq-listed stocks and invest in initial public offerings, said Gregor Bailar, executive vice president and CIO at the National Association of Securities Dealers Inc., Nasdaq's Washington-based parent company.
Nasdaq's intent, said Bailar, is to make it easy and cost-effective for investors and member firms to route trades to Nasdaq via the Internet -- even if that means siphoning trading activity away from electronic communications networks such as Instinet Corp. and other exchanges. "Our altruistic purpose is to create the best trading environment, period," said Bailar.
Nasdaq plans to begin alpha testing the new trading systems this summer, followed by a beta test with 20 to 50 member firms during the fourth quarter of 2000, said Bailar. He said the company plans to launch Nasdaq-Japan in the first quarter of 2001, with Nasdaq-Europe close on its heels.
Bailar wouldn't disclose how much Nasdaq is investing in IndigoMarkets, though he placed the figure "in the millions" of dollars.
Last June, Nasdaq announced an agreement with Softbank Corp. to create Nasdaq-Japan. In December, Nasdaq reached an agreement with the Osaka Securities Exchange to establish Nasdaq-Japan as a new section of the OSE.
In November, Nasdaq entered into a partnership with Softbank, News Corp. and Vivendi to create a pan-European stock exchange.