Inet - the super ECN created from the merger of Instinet and Island - is to participate in Nasdaq's SuperMontage system following last minute rule changes and concessions by the US exchange.
In a statement, Inet says it will begin displaying orders on SuperMontage in January following the consolidation of the Island and Instinet ECNs.
The decision follows months of manouevring by Nasdaq's new management team, led by CEO Bob Griefeld and EVP Chris Concannon, aimed at persuading Inet to drop its plans to freeze out SuperMontage and quote on the Cincinnati Stock Exchange. Last minute concessions by Nasdaq to cap fees and abolish execution priorities between ECNs and marketmakers eventually swung the decision in Nasdaq's favour.
Alex Goor, executive vice president, head of alternative trading systems, Instinet comments: "As a result of Nasdaq's recent proposed rule changes, we expect that participation in SuperMontage will benefit our subscribers."
Between them Inet and Nasdaq will account for approximately 42% of stock transactions on the hi-tech market. Without Inet's participation, Nasdaq's $100 million investment in SuperMontage would have stagnated.
Says Chris Concannon: "SuperMontage was designed to provide a highly transparent, highly liquid venue where multiple parties - and competing market models - can come together to yield the best outcome for investors."
Separately, Nasdaq announced that it intends to use Instinet SmartRouter technology to provide its members with access to enhanced routing services. Instinet SmartRouter integrates liquidity pools including all major ECNs through its order routing algorithm.