Nasdaq IPO Could Raise Up to $1 Billion

The planned stock offering in the Nasdaq Stock Market should raise as much as $1 billion, Frank Zarb, chairman of the National Assn. of Securities Dealers, said Wednesday.

Providing details of the proposed offering that NASD officials will debate at a board meeting today, Zarb said NASD needs at least that sum to make the deal work.

NASD, which owns Nasdaq, would spin off Nasdaq as a for-profit company and keep its regulatory unit, which polices all U.S. brokers, as a not-for-profit unit, Zarb said.

Most money generated by the Nasdaq stock sale would be used to fund the regulatory unit, and some would be used by Nasdaq for technology investments, he said.

“That billion-dollar figure is bullet-proof, because we wouldn’t proceed without being sure that the regulatory unit is fully funded,” Zarb said.

He was responding in part to regulatory concerns raised by Securities and Exchange Commission Chairman Arthur Levitt this week.

NASD plans to privately sell stock and warrants at a discount to all of its 5,400-member brokerage firms and to the 4,900 Nasdaq-listed companies, possibly as early as this year, Zarb said.

The stock offering to the public would follow next year.

Nasdaq’s main competitor, the New York Stock Exchange, is also planning to go public.

Meanwhile, London’s Financial Times said one idea NASD is pursuing is to set up an Internet-based platform for trading Nasdaq stocks--which could potentially reverse the inroads made by upstart electronic trading networks.