Nasdaq Speaks the Language of the Quebecois

VANCOUVER -- The Nasdaq Stock Market announced on Wednesday that it had reached an agreement with the government of Quebec on the establishment of a Canadian technology exchange to be headquartered in Montreal.

According to the proposal, the two parties will create the Nasdaq Canada stock exchange in Montreal to give American investors easier access to Canadian markets and vice versa.

"The arrival of Nasdaq satisfies a real need, both for companies and investors," said Bernard Landry, Deputy Prime Minister and Minister of State for the Economy and Finance of Quebec. "That is why we are very confident of Nasdaq's success in Montreal."

The Canadian venture follows the Nasdaq's two other international expansions: the Nasdaq Europe Market and the Nasdaq Japan Market. The latter will begin operations in June 2000.

It also follows the news earlier this month that the National Association of Securities Dealers membership voted overwhelmingly in favor of a restructuring which will see the Nasdaq spun off as a separate, publicly traded entity.

According to Landry, the new Nasdaq market is expected to begin trading in the last quarter of this year. NASD member firms and registered personnel will be allowed to participate and regulation will be carried out by NASD Regulation and the Quebec Regulatory Authority. Trading will be conducted in U.S. dollars.

Currently, Canada has more than 128 companies listed on the Nasdaq, more than any other country outside of the United States.

"Our agreement in principle with the Quebec government to create Nasdaq Canada will make it easier for Canadian investors to participate in the Nasdaq Stock Market, U.S. investors to participate in the Canadian economy and for Nasdaq to help foster a new generation of growth companies in Canada," said Frank Zarb, Chairman and CEO of the NASD.

The northern Nasdaq will operate separately from the Montreal Exchange, which deals almost exclusively with derivatives. After last year's realignment of the Canadian stock exchanges, the 125-year-old market lost its senior listings to the Toronto Stock Exchange and its small and midsize listings to the Calgary-based Canadian Venture Exchange.

The restructuring rubbed Quebec's separatist government the wrong way.

Quebec Premier Lucien Bouchard took the opportunity to espouse his province's merits during the announcement. "The strategy of openness on the world adopted by Nasdaq harmonizes perfectly with Quebec's openness to free trade," he said. "We intend to continue in the same direction and take full advantage of the strategic opportunity provided by Nasdaq's arrival."