NASD May Make Bid for Pacific Exchange

The National Assn. of Securities Dealers may pursue an acquisition of the Pacific Exchange, which saw its plan to merge with the Chicago Board Options Exchange collapse earlier this month. At the same time, NASD Chairman Frank Zarb said, continuing talks to acquire another options market, the Philadelphia Stock Exchange, “face major obstacles” and “still could unravel.” Zarb’s remarks raise the prospect that his zeal for consolidation soon may also include the Pacific Exchange, the third-largest U.S. options market, with trading floors in Los Angeles and San Francisco. “We’re open to conversations with Pacific and need to study the issue,” Zarb said. “We’d have to feel that Pacific adds value to our market and is economically viable.” Pacific Exchange spokesman Dale Carlson said the exchange’s banker, Wasserstein Perella & Co., has been contacted by “two or three entities” he wouldn’t identify that expressed interest in discussing consolidation. “We’re open to strategic alliances,” he said. Zarb’s staff began talks with Pacific Exchange last year about the possibility of an acquisition, then postponed them once the CBOE began serious negotiations.