Prime Policy Group represented Instinet, a company providing a platform for stock trades, in competition with the N.Y. Stock Exchange and NASDAQ. The SEC was considering adopting a rule called “Supermontage,” which would require Instinet and other independent providers of trading services to go through a clearinghouse run by the National Association of Securities Dealers (NASD), part owner of NASDAQ. This would have diverted business from the independents to the large exchanges and was anti-competitive.

Strategy & Implementation

The NASD had filed proposed rules governing the implementation and operation of the Alternative Display Facility (ADF) it was required to provide as a result of the separation of Nasdaq and its exchange application, and as part of the SEC order approving Nasdaq’s SuperMontage. The ADF allowed registered NASD market makers and ECNs (Electronic Communications Networks) to publish quotations for, and report trades in, listed securities–including stocks listed on the NYSE, Amex and Nasdaq, once it became an exchange.

However, many in the industry called on the SEC not to approve the Nasdaq exchange application until details on the ADF were released. It was Instinet’s perspective (one of the largest ECNs) that while it remained interested in the ADF, it did not feel that the rule filing fostered enough competition and innovation in the OTC marketplace.
To achieve desired changes in SuperMontage, Prime had Instinet and other ECN officials meet with both legislators and the Securities and Exchange Commission leadership at both the Commission and staff level. As a result, the SEC required the National Association of Securities Dealers to build an alternative quotation and transaction display facility as a precondition for SuperMontage approval.


Prime Policy Group helped Instinet defeat the NASD proposal and got the SEC to adopt a version of Supermontage that preserved the competitive marketplace by working key senior Members of Congress and Senators and getting them to weigh in with the SEC.