A Celent Communications report published today – Nasdaq SuperMontage: Will ECNs Survive? -predicts that ECNs not participating in SuperMontage will see their market share evaporate. In recent years, ECNs have come to account for a over third of trading volumes on Nasdaq. SuperMontage, Nasdaq’s answer to this threat, is a fully integrated order display and execution trading platform which Celent believes will garner over two thirds of Nasdaq liquidity by 2005.
“ECNs have come a long way since their inception in 1997,” says Sang Lee, an analyst at Celent. “In a relatively short period of time, ECNs have carved up a significant level of market share within Nasdaq. However, the eventual launch of SuperMontage threatens to reshape Nasdaq. In this new world, the very existence of ECNs may be redundant.”
Octavio Marenzi, Managing Director at Celent adds: “ECNs represented a temporary solution to a fragmented marketplace. With the launch of SuperMontage, and the consequent centralization of Nasdaq liquidity under SuperMontage, we expect to see the beginning of the end of ECNs as we currently know them.”