Regional exchanges struggle in shadow of NY markets.(The Dallas Morning News)

CHICAGO _ For years, the nation's five regional stock exchanges seemed content to play a quiet second fiddle to the New York Stock Exchange and the Nasdaq stock market.

Even now, as the two big exchanges roar through one of the grandest bull markets ever, the regionals shuffle along, handling perhaps 10 percent of the Big Board's volume and a tiny share of the Nasdaq's.

But some of these survivors from a financial system predating the telegraph may not last much longer if they don't embrace the changes sweeping the securities industry, market experts say.

The choice is clear, analysts and others say: Innovate or die.

"We have seen more change in this industry in the past 18 months than in the past 200 years," said Dale Carlson, spokesman for the San Francisco-based Pacific Exchange. "And what we have seen so far will pale in comparison to the next 18 months."

The exchanges in Chicago, San Francisco, Boston, Philadelphia and Cincinnati occupy a small but busy lane on the nation's financial highway.

Approximately 100 million NYSE shares may pass through one or more regional exchanges on a typical day. A Dallas investor who buys shares in a Big Board-listed company might have that trade executed through a computer in Boston or San Francisco, not on the bustling NYSE floor familiar to millions of television viewers.

Trouble is, the same advances that make that hypothetical Dallas trade possible somewhere other than New York also menace much of the securities …