Nasdaq System Designed to Give Clearer Picture

SuperMontage, Nasdaq’s planned upgrade for its trading system, is the No. 2 U.S. stock market’s attempt at rebuffing a new generation of electronic rivals.

Nasdaq says the system will give trading firms and investors a more complete picture of the market at any moment--theoretically improving their chances of getting the best possible buy or sell prices for Nasdaq shares.

Currently, Nasdaq computer terminals display the best buy and sell quotes from each dealer (“market maker”) in Nasdaq shares.

With SuperMontage, more market-maker quotes will be displayed for each stock, improving the market’s “depth,” Nasdaq says. What’s more, the system can include quotes available through Nasdaq’s rivals, so-called ECNs, or electronic communications networks, which match buyers with sellers.

SuperMontage also is designed to fully automate the execution of orders to make sure they are handled faster and more reliably.

In recent years, Nasdaq has faced growing competition from ECNs, which have pitched themselves to investors as cheaper and quicker trading systems than Nasdaq. SuperMontage is aimed at taking back market share lost to the ECNs.

SuperMontage has been a long time in coming. It was first proposed in 1999 and has gone through a variety of iterations to address complaints from lawmakers, consumer groups and ECNs.

If approved by the SEC on Wednesday, Nasdaq would launch SuperMontage on Sept. 9 and roll it out over the following month.