The National Association of Securities Dealers will announce on Tuesday a plan to create a Japanese version of its Nasdaq Stock Market in a joint venture with Tokyo's Softbank Corp., Softbank said.
Under the plan, companies with sales in the United States and Japan would begin trading on the new market in 2000.
American and Japanese securities dealers would trade stocks on the new market. The system would complement Jasdaq, Japan's over-the-counter market.
Frank Zarb, chairman of the NASD, is expected to announce the deal in a satellite broadcast from Japan, where he went to discuss the plan with the Ministry of Finance. The broadcast will be the focus of a news conference at Nasdaq's New York market site on Tuesday.
Zarb has been negotiating with Softbank for months as part of a plan to trade U.S. stocks globally. He has talked to several stock markets around the world about affiliations and in December announced an alliance with the Stock Exchange of Hong Kong. The NASD also plans to open a Shanghai office next year.
Softbank is a big investor in online companies, with a 28 percent stake in Yahoo. Last week, it said it would make a major investment in Global Sports Inc., which has an online retailing arm.
Zarb and other NASD officials were surprised when the highly confidential talks were reported in Nihon Keizai Shimbun, a Japanese financial daily. Some NASD directors were riled because they had not been informed of the negotiations.
One board member, Alan Davidson, said the NASD should be focusing on problems at home. The NASD, the parent of Nasdaq and the American Stock Exchange, has been losing business to electronic communications networks (ECNs), which match buyers and sellers. The New York Stock Exchange also plans to begin trading Nasdaq stocks soon.
"If I saw Frank Zarb, I'd grab his credit card and cut it up so he couldn't leave the country anymore," said Davidson, president of Zeus Securities, a small Long Island brokerage. "Nasdaq has lost 30 percent of its business to ECNs and he's running around Japan."