OSAKA -- The Osaka Securities Exchange and the U.S. Nasdaq market are in talks on taking equity stakes in each other in a bid to further strengthen collaboration, OSE sources said.

The two exchanges will decide on the concrete terms of the capital tieup by March, according to the sources. The OSE will become a joint stock company in May.

The OSE wants the ratio of the equity stakes to be less than 3 percent in the capital tieup deal proposed by Nasdaq, in order to maintain management freedom.

The OSE, the second-largest exchange in Japan, launched the Nasdaq Japan market in June with the U.S. Nasdaq market's parent, the National Association of Securities Dealers.

The OSE and the NASD announced last week they had reached an agreement that will enable the OSE to list derivative financial products.

The capital tieup is to further strengthen ties with Nasdaq and make the OSE a member of the "Nasdaq camp," the sources said.

Nasdaq is considering merging with a new European exchange named iX, which is slated to be created this fall through a merger of the London and Frankfurt bourses.

The OSE is eyeing a larger presence in Asia through the capital tieup with Nasdaq and wants to achieve as soon as possible its goal of providing stock trading around the clock, the sources said.

Last week, the OSE agreed with the Chicago Board Options Exchange to open talks on a comprehensive alliance for trading in stock-index options in view of the 24-hour global trade in options.