[NEW YORK] Nasdaq Inc is responding to a competitor preparing to enter the exchange arena.
Nasdaq plans to offer a new order type aimed at long-term investors, the company announced Monday.
The exchange operator expects to have the new order available for use by the end of year, said Nasdaq Chief Executive Officer Bob Greifeld, pending approval from the US Securities and Exchange Commission. The order will allow an investor to get priority in the trading queue by committing to not change or cancel their trade for a period of one second.
"This is a revolutionary new market structure wrapped up in an order type," Mr Greifeld said in an interview. "I think the great innovation of this approach is the simplicity of it."
The new offering comes as IEX Group Inc prepares to begin trading on Friday after winning approval to operate as a full- fledged stock exchange. The company, which currently runs a private trading venue known as a dark pool, has for years courted long-term investors with its "speed bump," which slows orders down by 350 microseconds with the aim of dulling the advantages of high-speed traders.