The Primex Auction is a unique trading system that is offered as an optional service to all Nasdaq participants. Marketable orders of all sizes may be routed to the system, where they are briefly exposed to an electronically linked crowd of competing broker/dealers, proprietary traders, institutions, and electronic communications networks (ECNs). The auction is conducted continuously at and inside the National Best Bid and Offer (NBBO). Most executions in the system will occur instantaneously.
Developed by Primex Trading N.A., LLC, the system will have full functionality from the outset. Nasdaq will phase in the securities eligible to trade on the system over the first few months of the system's operation. For the first three weeks, participants will be able to trade the 30 stocks in the Dow Jones Industrial Average - including Nasdaq bellwethers Microsoft and Intel. On January 7, Nasdaq will expand trading to stocks in the Standard & Poor's 100 Index®. On January 22, the list of eligible securities will widen again to include stocks in the Nasdaq 100 Index®.
This limited list of securities will remain in effect through March 31, 2002, when the initial start-up phase is scheduled to end. Nasdaq has waived all fees associated with linking to, and transacting in, the Primex Auction System for the duration of the initial start-up phase.
So far, more than 60 broker/dealers have registered as Primex Auction System participants. Some of these firms will access the system directly, while others will use connections established by some of the industry's biggest order-routing and trade-management software vendors.
"We are expecting a very gradual build in usage, because of the limited number of issues included in the roll-out as well as the time needed for order management and order routing vendors to integrate their systems," said Gene Lopez, Senior Vice President, Nasdaq. "Software vendors including Sungard Trading Systems/BRASS, Nasdaq Tools, and Lava Trading are completing the revisions necessary to seamlessly connect the Primex Auction System with firms' internal trading systems."
"Conducting a real-time, instantaneous auction process across the Nasdaq market is a systematic challenge," said Glen Shipway, CEO, Primex Trading N.A., LLC. "That's why we deliberately are being cautious as we roll out the system."
The Primex Auction provides systematic interaction among retail and institutional market participants. Orders being exposed receive additional opportunities for price improvement, while larger-sized investors standing in the electronic crowd can access previously inaccessible order flow.
The Primex Auction is the creation of Primex Trading N.A., LLC, a partnership formed by securities industry brokerage firms and investment banks including Merrill Lynch, Salomon Smith Barney, Goldman Sachs, Morgan Stanley and Bernard L. Madoff Investment Securities. New York-based Primex Trading N.A., LLC conceives, designs, and licenses trading solutions for the securities industry. For more information go to www.primextrading.com, or contact Glen Shipway at glen.shipway@primextrading.com.
The Nasdaq Stock Market lists over 4,100 companies and trades more shares per day than any other U.S. market. For more information about Nasdaq, visit the Nasdaq Web site at www.nasdaq.com or the Nasdaq NewsroomSM at www.nasdaqnews.com.
