Nasdaq, one of the largest electronic equity exchanges in the US, is in talks with the Ahmedabad Stock Exchange, India's second-oldest exchange, and a couple of other regional stock exchanges for a possible collaboration.

If the deal is struck, the ASE will become the first regional exchange to have a foreign partner.

"The tie-up with the ASE could either be an equity partnership or a technology tie-up, or both. The regulatory bodies have to clear the proposal and we also need approval from our members first," a top ASE official said on conditions of anonymity.

Sources close to the development said one of the objectives of the collaboration is to create a third parallel platform on the lines of the Bombay Stock Exchange and the National Stock Exchange, the two largest equities markets in India.

NSE, one of Asia's top five exchanges in terms of the number of trades, has a tie-up with Nasdaq's New York rival, the New York Stock Exchange.

In the BSE, the permissible 26 per cent foreign direct investment stake has already been reached. Deutsche Borse and Singapore Exchange are among the major investors in the exchange.

Several regional exchanges had considered tie-ups with Nasdaq but opted out after they were demutualised � that is, the members' interests were converted into shareholdings to conform to Securities and Exchange Board of India requirements.

ASE picked up the thread and is currently leading a couple of other exchanges for a possible tie-up, sources said.

K K Mishra, executive director of ASE, refused to confirm or deny the development. An e-mailed query to Nasdaq remains unanswered.

As part of the Sebi's demutualisation guidelines, ASE offloaded about 52 per cent stake in September last year. As many as 49 applicants picked up stakes, including IL&FS, Nirma Credit & Capital, Bhagwati group, Kataria Automobiles and Ankit Financial Services. ASE had fixed a price of Rs 12 for its equity share of Re 1 each.

Besides listing ASE, the regional exchange has also been considering ways to unlock value of its subsidiary Ahmedabad Capital Markets Ltd by way of divestment. The exchange has approached the regulator to permit futures and options trading, sources said.