(April 18) – “The American Stock Exchange and the parent of the Nasdaq Stock Market, just 2 1/2 years into their once-promising marriage, appear headed for a breakup,” writes Kate Kelly in today’s Wall Street Journal.

“Faced with a November 1998 merger that hasn’t delivered on most of the expected advantages in competition with the New York Stock Exchange, the National Association of Securities Dealers, currently parent to both the Amex and Nasdaq, quietly is “shopping” the Amex to competing exchanges, people familiar with the matter say.”

“The Amex, by far the smallest and least profitable of the three major U.S. stock exchanges is trying, in turn, to forge new relationships of its own. The Amex’s direct management, led by its chairman, Sal Sodano, has been exploring the landscape for alliances and joint ventures that could help it survive apart from the NASD.”

“Early this year, according to people close to the situation, the Amex’s management and stock-trading system, Instinet Group LLC, a unit of Reuters Group, had formal talks on a partnership. Mr. Sodano has also met with Jerry Putnam, chief executive of an Instinet competitor, Archipelago LLC, another electronic-trading system, about a possible partnership; those talks don’t appear to be leading to an imminent deal.”

“Neither Mr. Sodano nor Instinet would comment specifically on those discussions, while Archipelago confirms there were informal talks on its end.”

“Robert Glauber, chief executive officer of the NASD, in an interview characterized his approach as seeking to spin off the Amex, just as a portion of the Nasdaq has been sold off to Wall Street firms and other private investors. He won’t discuss the talks with Instinet.”

” ‘Where I’d like to see the Amex is ultimately in the same posture as the Nasdaq is to us,’ Mr. Glauber said. ‘I think it should be spun off and separate.’ He declined to put a time frame on the separation, but said that for the rest of 2001 at least, the focus would be on the Amex’s continuing ‘renewal.’ One of the people familiar with the Instinet talks said that Mr. Glauber had expressed hopes to have NASD’s stake in the Amex be ‘zero percent by the end of 2002.’ “