NASDAQ has placed its Linux-based IT systems at the front of an $11.3 billion (£7 billion) effort to thwart a merger between the New York Stock Exchange and Deutsche Borse.
The high-tech stock market is teaming up with InterContinentalExchange in an attempt to acquire NYSE Euronext from under the nose of Deutsche Borse, which only last month announced it was the approved bidder for the exchange.
The Deutsche Borse merger also appeared to offer a Linux-based technology mix, as both firms run Red Hat Linux, but NASDAQ has directly attacked Deutsche Borse's ability to integrate technology.
NASDAQ said in a statement that following Deutsche Borse's $2.8 billion purchase of the International Securities Exchange from NASDAQ in 2007, the German exchange "failed to integrate technology platforms years after the transaction...ISE is still powered by NASDAQ OMX Technology".
In a joint statement, NASDAQ and the InterContinentalExchange said their proposed merger with NYSE would deliver “geographic footprint, scale and world-class technologies”, as well as innovation in derivatives markets.
The merger “creates a leading global exchange in equities, options, listings and exchange related technology”, they said, which was vital in order to operate in an increasingly competitive market.
As part of the proposal, InterContinentalExchange would purchase NYSE Euronext's derivatives businesses, and NASDAQ would retain NYSE Euronext's remaining businesses, including the NYSE Euronext stock exchanges in New York, Paris, Brussels, Amsterdam and Lisbon, as well as the US options business.
Last month, NYSE Euronext said it had also extended its presence in London, establishing datacentre co-location services in the City, working with host company Interxion. It promised "low latency" trading and data services for customers there.
The combined NASDAQ and NYSE business would merge the trading, listings, options and market technology businesses of the two companies, headquartered in New York City.
A unified technology platform in US equities “would also lower firms' and investors' trading costs and provide increased liquidity and transparency”, they said.
In terms of systems in use at the exchanges, NASDAQ’s Genium INET platform runs on Linux in a reported C++ environment, and claims to deliver an average 97 microsecond latency. However, this may not be an average that includes peak periods.
NYSE Euronext is currently moving all of its matching engine technology over to its own Linux-based setup, called the Universal Trading Platform, which runs on x86 servers. It also runs the Liffe Connect, which NASDAQ said would be replaced, as well as the Unix/Linux based Arca platforms, and its NSC platform operates in a Unix and Linux environment.