A plan to combine the Nasdaq Stock Market and the American Stock Exchange received preliminary approval Wednesday from the boards of the two markets.
The marriage of the nation’s second- and third-biggest stock markets would provide tougher competition for the venerable New York Stock Exchange and reward traders and investors by lowering costs.
The plan tentatively approved on Wednesday would allow the two stock markets to continue running separately under an umbrella organization, said a source familiar with the proposal, who spoke on condition of anonymity.
The deal still faces approval by industry and antitrust watchdogs. It also requires backing from two-thirds of the Amex’s 864 members, including traders, brokers and investors who buy exchange seats for their value and lease them.
The National Association of Securities Dealers, which owns the Nasdaq Stock Market, only needs approval from its board to proceed with a merger. But the Amex is owned by its members and therefore needs their approval as well.
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