History of NASDAQ

---

When the NASDAQ stock exchange began trading on February 8, 1971, the NASDAQ was the world's first electronic stock market. At first, it was merely a computer bulletin board system and did not actually connect buyers and sellers. The NASDAQ helped lower the spread (the difference between the bid price and the ask price of the stock) but somewhat paradoxically was unpopular among brokerages because they made much of their money on the spread.

NASDAQ was the successor to the over-the-counter (OTC) and the "Curb Exchange" systems of trading. As late as 1987, the NASDAQ exchange was still commonly referred to as the OTC in media and also in the monthly Stock Guides issued by Standard & Poor's Corporation.[3]

Over the years, NASDAQ became more of a stock market by adding trade and volume reporting and automated trading systems. NASDAQ was also the first stock market to advertise to the general public, highlighting NASDAQ-traded companies (usually in technology) and closing with the declaration that NASDAQ is "the stock market for the next hundred years." Its main index is the NASDAQ Composite, which has been published since its inception. However, its exchange-traded fund tracks the large-cap NASDAQ 100 index, which was introduced in 1985 alongside the NASDAQ 100 Financial Index.

Until 1987, most trading occurred via the telephone, but during the October 1987 stock market crash, market makers often didn't answer their phones. To counteract this, the Small Order Execution System (SOES) was established, which provides an electronic method for dealers to enter their trades. NASDAQ requires market makers to honor trades over SOES.[4]

In 1992 it joined with the London Stock Exchange to form the first intercontinental linkage of securities markets. NASDAQ's 1998 merger with the American Stock Exchange formed the NASDAQ-Amex Market Group, and by the beginning of the 21st century it had become the largest electronic stock market (in terms of both dollar value and share volume) in the United States. NASD spun off NASDAQ in 2000 to form a publicly traded company, the NASDAQ Stock Market, Inc.[5]

On March 17, 2007, the Honorable Michael G. Oxley was named non-executive Vice Chairman of NASDAQ. He joined NASDAQ after a 34-year career in public life, including 25 years of distinguished service in the U.S. Congress and as former Chairman of The House Financial Services Committee. In his role as non-executive Vice Chairman, Mr. Oxley works with public company chief executives and board members on NASDAQ’s behalf and oversees outreach to NASDAQ listed companies on public policy issues. He also serves as an advisor to NASDAQ President and Chief Executive Officer Robert Greifeld and the NASDAQ Board of Directors.[6]

On November 8, 2006, NASDAQ agreed to buy the Philadelphia Stock Exchange(PHLX) for US$652,000,000. PHLX is the oldest stock exchange in America—having been in operation since 1790.[7]

NASDAQ lists approximately 3,200 securities, of which 335 are non-U.S. companies from 35 countries representing all industry sectors.[8] To qualify for listing on the exchange, a company must be registered with the SEC, have at least three market makers (financial firms that act as brokers or dealers for specific securities), and meet minimum requirements for assets, capital, public shares, and shareholders.[9]

---