This excerpt taken from the NDAQ 8-K filed Feb 20, 2008.
Price competition has affected and could continue to affect the business of Nasdaq, OMX and PHLX.
The securities trading industry in the United States is characterized by intense price competition. We have in the past lowered prices and increased rebates for trade executions to attempt to gain or maintain market share. These strategies have not always been successful and have at times hurt operating performance. OMX similarly reduced its trading fees in 2007 and 2008, and its operating performance may be hurt if the trading fee reductions do not result in sufficiently increased market share. Additionally, we have also been, and may once again be, required to adjust pricing to respond to actions by competitors, which adversely impacts operating results.
OMX and PHLX are subject to potential price competition from new competitors and potentially from new and existing regulated markets and multilateral trading facilities.
The securities trading industry also competes with respect to the pricing of market data. In addition, we are subject to price competition with respect to proprietary products for pre-trade book data and for post-trade last sale data. In the future, our competitors may offer market data rebates for quotes and trades on their systems. The success of competitors for trade executions, pressure from users for lower data fees and regulatory changes could also affect OMXs market data business and PHLXs options trading business.
Our trade reporting facility (which we operate jointly with the Financial Industry Regulatory Authority (FINRA, formerly known as the National Association of Securities Dealers (NASD)) for the purpose of accepting reports of off-exchange trades) faces competition from the trade reporting facilities operated jointly with FINRA by the National Stock Exchange and the NYSE. Our trade reporting facility also faces competition from FINRAs alternative display facility. Our competitors market data rebate programs for trade reporting could lead to a loss of market share and decreased revenues.