(June 8) – “The Big Board has invited fellow stock markets around the world to a party. But one isn’t welcome: the rival Nasdaq Stock Market,” write Terzah Ewing, Silvia Ascarelli and Bill Spindle in today’s Wall Street Journal.

“Wednesday, the New York Stock Exchange, confirming recent reports in The Wall Street Journal and elsewhere that it is in discussions with overseas peers, pushed the idea of market globalization and 24-hour trading another step forward. The world’s largest stock exchange named nine probable partners and said it is working with them toward a pact on what it has dubbed the Global Equity Market, or GEM.”

“Few details were available, and NYSE Chairman Richard Grasso says they won’t be released until a preliminary pact is reached. Even the probable timing of that wasn’t disclosed, though a feasibility study could be completed around September.”

“What is clear is that the deal won’t involve a megamerger among the proposed partners. Instead, Mr. Grasso says: ‘The goal here is to allow each respective market participant to retain its identity and yet serve as a portal to a larger platform that will follow the sun.'”

“‘The linkage of liquidity,’ he adds, ‘is the prime benefit to investors.'”

“Unless, that is, the liquidity you are looking for is in Microsoft or another big Nasdaq stock. The alliance won’t be limited to the 10 exchanges now involved in the talks, Mr. Grasso says, with one proviso: Any new members must offer transparent trading, regulate themselves — and have an ‘agency-auction’ structure like the NYSE.”

“It is that last requirement that cuts out Nasdaq. It is one of the few major markets world-wide that doesn’t use that model, in which investor orders for stock are matched with each other in a central location or over a central system. Instead, Nasdaq is an electronically linked decentralized market in which most investors trade with a dealer instead of another investor.”

“Nasdaq Chairman Frank Zarb shrugged off the snub. ‘We have always welcomed the internationalization of the markets,’ he said in a statement. ‘Competition is good.'”