Premier Lucien Bouchard was in Montreal on Tuesday afternoon for the official launch of Nasdaq Canada's operations in Montreal.

The boutique exchange will give Canadian investors direct access to its US marketplace and extend its reach as it expands in North America, Europe and Japan.

The launch of Nasdaq Canada is also a direct challenge to Canada's major bourse, the Toronto Stock Exchange, which itself is forging links with stock markets in New York, Japan and Europe.

Process will take time

The full deployment of Nasdaq Canada should take between one and two years, Nasdaq officials said, cautioning that many details still need to be worked out on the technological and business sides.

"There are so many events that can either delay or speed it up, we try not to give specific dates,'' said Nasdaq chairman and chief executive Frank Zarb.

"You know it's a certainty, and you know within two years it will get done,'' he said.

Province had suffered a loss

The arrival of Nasdaq in Montreal is also a coup for the Quebec government, since the province lost its only equities market when the Canadian stock exchanges reorganized their activities last year. The Montreal Exchange now handles futures, while Toronto has senior equities.

"The arrival of Nasdaq will enhance competition and liquidity of the markets,'' Quebec Minister of Finance Bernard Landry said, before ringing the opening bell of session on the Nasdaq with Quebec premier Lucien Bouchard.

What it will look like

Nasdaq Canada will allow investors to buy 5,000 Nasdaq-listed securities, including the 146 Canadian companies that list on the Nasdaq in the U.S.

"With Nasdaq work stations now in place in Montreal, Canadian investors can get immediate access to both the Canadian companies listed on Nasdaq as well as all other Nasdaq issues," a Nasdaq release stated.

Hold-outs

Ten big brokerage houses will be members of the electronic exchange. But several others-- notably, RBC Dominion Securities and Merrill Lynch Canada-- have not joined as yet.

A separate Nasdaq Canadian market is still some time away. As of Tuesday, investment dealers will just be able to trade Nasdaq-listed stocks from desktop terminals in their Montreal offices.

At first, Canadian investors will have to trade issues in US. dollars. Eventually, trading in Canadian dollars will be possible.

Nasdaq Canada Index

On Tuesday, Nasdaq Canada also unveiled a Nasdaq Canada Index, which tracks the market performance of the 146 Canadian companies that list on the Nasdaq, including 42 Canadian companies that list only on the Nasdaq.

Phase Two of Nasdaq Canada, besides allowing for trading in Canadian dollars, will give Canadian companies the opportunity to list exclusively on Nasdaq Canada.

Nasdaq Canada is seen as a direct challenge to the Toronto Stock Exchange and its supremacy of Canadian capital markets. The TSE was highly critical of the Nasdaq Canada expansion when it was first announced in the spring, saying it wouldn't provide investors with any significant advantages.

Phase Three of Nasdaq's Canada rollout will include the global linking of Nasdaq Canada with Nasdaq US, Nasdaq Japan, and Nasdaq Europe.