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Last Updated: Monday, 21 August 2006, 09:49 GMT 10:49 UK
Nasdaq 'does not fear price war'
Nasdaq sign
Nasdaq is confident it will prosper under new rules
The US stock market Nasdaq will not shy away from a price war if its bigger rival, the New York Stock Exchange (NYSE) cuts prices, a report says.

Nasdaq told the Financial Times that the prices it charged traders were already half those of NYSE.

New rules come into play later this year aimed at increasing competition within US stock exchanges.

Exchanges must post their best prices electronically and brokers must trade wherever the best price is offered.

Bankers predict that the new rules, introduced by the Securities and Exchange Commission, will lead to lower costs and higher volumes of trading.

NYSE expects that its trading floor based operation will still be popular, though it is also introducing a hybrid system where orders can be made electronically as well as through brokers.

The FT reported insiders at NYSE as saying that its size and liquidity would give it a competitive edge, meaning it should be able to offer the best prices on the exchanges.

Head of transaction services at Nasdaq, Chris Concannon said: "I feel very comfortable with our current pricing position."

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