NYSE/Nasdaq Mud-Slinging Escalates

The backbiting between the New York Stock Exchange and the Nasdaq OMX Group has escalated, with the NYSE comparing Nasdaq’s share and listing statistics to "A Midsummer Night’s Dream." NYSE member firm and listings departments fired off nearly-identical missives to members and issuers saying that like the romantic comedy, Nasdaq’s marketing of its volume and listings successes "blends identities and blurs the lines between fantasy and reality." NYSE has called attention to what it perceives to be inaccuracies in Nasdaq’s reporting for the past few months, and it promises to continue to do so without "Shakespearean drama."

NYSE and Nasdaq have been at each other’s throats for both trading and listing market share, and lately, their marketing departments have been fighting over how each use statistics to prove they are the biggest. NYSE’s two-page letter is believed to have originated in part as a response to a number of ads Nasdaq has been running to pump its volume records in NYSE-listed securities. The most recent full-page Wall Street Journal ad ran last Thursday with a notable Nasdaq quote: "Maybe we should call it the not-so-Big Board," referring to the July 11 record in which Nasdaq’s market share surpassed the NYSE’s floor.

NYSE’s letter claims that it continues to be the largest exchange despite the floor losing its share because Arca not only brings in ETF listings and volume to the exchange but also tackles Nasdaq’s share in its own stocks. Nasdaq contends that adding a junior market’s contribution to that of the Big Board does not make for fair comparison. NYSE says that since the parent company, NYSE Euronext, encompasses both, both should be counted. As for the numbers NYSE is contesting, Nasdaq argues that it gets its data from the central SIAC utility, which is in fact owned by the NYSE. Listings numbers come from the World Federation of Exchanges, another impartial source.

Traders have taken the squabbles in stride, relying on smart routers rather than marketing to find the fastest, easiest ways to execute block liquidity.

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