This presentation represents work done by NASDAQ research Dept. Its simple its easy.

1. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
National Association
of Securities Dealers
Automated Quotation
Presented by:
SIDDHARTH GALA

2. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
A Market that Works for Investors
NASDAQ provides an open, transparent and competitive platform to
enable buyers and sellers to efficiently interact and access pools of
liquidity.

3. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
I. Introduction
• Computerized system established by the NASD to
facilitate trading by providing broker/dealers with current
bid and ask price quotes on over-the-counter stocks and
some listed stocks.
• NASDAQ does not have a physical trading floor that
brings together buyers and sellers.
• All trading on the NASDAQ exchange is done over
a network of computers and telephones.
3

4. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
I. Introduction
• Currently it has a greater trading volume than any other
U.S. exchange, making approximately 1.8 billion trades
per day.
• The NYSE is still considered the biggest exchange
because its market capitalization far exceeds that of the
NASDAQ.
• Well known for being a high-tech exchange, trading
many new, high growth, and volatile stocks.
• NASDAQ is a publicly owned company, trading its shares
on its own exchange under the ticker symbol NDAQ.
4

5. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
I. Introduction
• The exchange is a dealers' market, meaning brokers
buy and sell stocks through a market maker rather than
from each other.
• A market maker deals in a particular stock and holds a
certain number of stocks on his own books so that when
a broker wants to purchase shares, he can purchase
them directly from the market maker.
• NASDAQ National Market and the NASDAQ Small-Cap
Market developed from 1982 to 1986, as the larger
companies separated themselves from the smaller ones
5

6. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
I. Introduction
• The stock exchange built the NASDAQ MarketSite in New
York's Times Square to create a physical presence.
• The tower has a large outdoor electronic display, giving
current financial information 24 hours a day.
6

7. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
History
• Developed in 1971
• First electronic stock exchange in the world.
• Created as a means to increase the trading of Over-the-
Counter stocks, those that were unable to meet listing
requirements for larger exchanges.
• 2,500 OTC stocks were traded on the NASDAQ's first
trading day, February 8, 1971.
7

8. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
History
• 1990's - NASDAQ began to be seen as a competitor of
the NYSE
• 1994 - NASDAQ beat the NYSE in annual shares traded
• 1998 - NASDAQ merged with the American Stock
Exchange, which mostly traded options and derivatives,
creating the NASDAQ-AMEX Market Group.
• The combined company still operates as two separate
exchanges, but is better able to compete with the NYSE.
8

9. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
NASDAQ: Three Levels
• Level 1: is for the customers who do not consistently
trade which made them not a market maker and who
usually want the current quotes on stocks.
• Level 2: is for the customers who consistently trade
stocks which make the brokers to choose the market
maker with the best bid and/or ask and make the deal.
• Level 3: is for the market makers who wants the level 2
but also needs the capability to change their own
quotations
9

10. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
Facts that make NASDAQ the stock market of
choice for companies and investors.
1. NASDAQ is the stock exchange for industry leaders,
recognized around the globe as one of the largest U.S.
stock markets.
2. NASDAQ has significant reach in a broad range of
industry sectors
– financial, industrial, healthcare and consumer companies
comprise over 50% of NASDAQ listings.
1. NASDAQ has the world's highest listing standards.
2. NASDAQ is a global platform for capital formation.
3. NASDAQ is #1 on the NYSE.
10

11. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
Facts that make NASDAQ the stock market of
choice for companies and investors.
6. NASDAQ offers an exceptional product with lower
listing fees.
7. NASDAQ provides comprehensive, unbiased trading
analysis.
11

12. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
Why choose NASDAQ over the others?
• NASDAQ volatility is slightly lower than the
NYSE, according to a May 2005 independent study by the
U.S. GAO.
• NASDAQ maintains greater stability in times of market
stress.
–When markets are unstable specialist firms reduce their risk
by widening spreads, participating less, or halting the stock
altogether. NASDAQ's spreads remain tight and as a result
volume shifts to NASDAQ and other electronic markets.
• A NASDAQ stock with a $1B market cap, trading 1M
shares per day saves $1.5 million in trading costs per
year in comparison to a similar stock on the NYSE.
12

13. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. 13
Market Structure
 Superior Trading Characteristics
 Open, Competitive Market Delivering Best Executions for
Investors
Greater Visibility
 More Analyst Coverage (Multiple Market Maker System)
Better Services and Support
 Insight and Analysis Tools for Trading, Ownership and Peer
Comparisons
Superior Value for Listing $
 Listing Fees are less on NASDAQ vs. NYSE
Why do Companies list on NASDAQ?

14. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. 14
Consumer
Discretionary
13%
Energy
2%
Financials
22%
Health Care
17%
Industrials
10%
Information
Technology
28%
Materials
2%
Utilities
1%
Telecommunication
Services
2%
Consumer Staples
3%
NASDAQ – National Industry Leaders
*Includes Companies included in NASDAQ’s Dual Listing Program

15. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved. 15
NASDAQ National Market Listing Requirements
1 For Initial listing under Standard 3, a company must satisfy one of the following: the market value of listed securities requirement or the total assets and the total revenue
requirement. Under Marketplace Rule 4200(a)(19), listed securities is defined as “securities quoted on NASDAQ or listed on a national securities exchange.
2 Seasoned companies (those companies already listed or quoted on another marketplace) qualifying only under market value of listed securities requirement of Standard 3 must
meet the market value of listed securities and the bid price requirement for 90 consecutive trading days prior to applying for listing.
3 Publicly held shares is defined as total shares outstanding less any shares held by officers, directors or beneficial owners of 10% or more.
4 Round lot holders are considered holders of 100 shares or more.
5 An Electronic Communications Network (“ECN”) is not considered a market maker for the purposes of these rules.
6 Marketplace Rules 4350 and 4351.
NASDAQ National Market Listing Requirements

16. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
NASD
National Association of
Securities Dealers

17. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
History
• Watches over the NASDAQ to make sure the market
operates correctly.
• Self-Regulatory Organization of the securities industry
responsible for the operation and regulation of the
NASDAQ stock market and over-the-counter markets.
• In 2007, the NASD merged with the New York Stock
Exchange's regulation committee to form the Financial
Industry Regulatory Authority, or FINRA.
17

18. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
The Rules of Fair Practice
• NASD’s most important rules are those designed to
maintain high standards of conduct.
• Depending on the offense, a member found guilty of
infractions of these rules may receive a penalty as mild
as censure, or may receive a fine, a suspension, or even
expulsion from the Association.
• Expulsion is the ultimate penalty because an expelled
member would find it virtually impossible to carry on a
profitable business outside the NASD.
18

19. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.

20. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
Overview
• NASDAQ OMX Group, Inc. is the world's largest
exchange company.
• Delivers trading, exchange technology and public
company services across six continents, with
approximately 3,700 listed companies.
• Offers multiple capital raising solutions to companies
around the globe.
• NASDAQ OMX technology supports the operations of
over 70 exchanges, clearing organizations and central
securities depositories in more than 50 countries
20

21. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
Overview
•The world's largest IT industry exchange, with a total
market value over $2 trillion.
•The world's largest biotech industry exchange, with
total market value at almost $270 billion.
•The world's largest paper product industry (part of
the materials sector) exchange at a market value
over $32 billion.
•NASDAQ OMX is number one geographically in
major-worldwide listings, with approximately
3,700 companies in 50 countries representing
$4.1 trillion in total market value.
21

22. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
NASDAQ OMX Business Areas
• Global Data Products
• Global Index Group
• Listings-Corporate Client Group
• Transaction Services Nordics
• Transaction Services U.S.
• Corporate Services
• Market Technology
• NASDAQ OMX Europe
22

23. © Copyright 2004, The Nasdaq Stock Market, Inc. All rights reserved.
END