The London Stock Exchange has taken a 60% share in Turquoise, a rival equities trading platform. LSE will create a new pan-European trading venture through a merger of the businesses of Turquoise and Baikal, LSE’s dark pool business.
According to a statement from the LSE this morning: “The new venture will expand LSE services across Europe in both lit and dark trading, and liquidity aggregation, with the express objective of driving European trading volume growth and promoting venue choice. It will benefit from synergies with LSEG infrastructure and the planned migration to MillenniumIT trading technology.”
The new venture will continue to trade under the Turquoise name. LSE intends to sell 9% of its holding; the remaining 40% of Turquoise is owned by a number of investment banks who founded the MTF in 2008. One of the main reasons for launching Turquoise was to put pressure on the trading fees of major exchanges. Turquoise has yet to turn a profit.
Commenting on the deal, Xavier Rolet, CEO of LSEG and Chairman-designate of the new venture, said: “We are very pleased to be joining forces with a number of our major clients in a partnership which we believe will offer an attractive range of innovative and competitively priced products and services across Europe.
“The European marketplace for trading securities has scope to become more efficient and to grow significantly in the coming years. Turquoises existing pan-European footprint is a strong proposition and together with the introduction of new trading technology and a neutral structure, we believe it is now well positioned to be an agent of change and to capture a healthy slice of the market’s growth potential.”
Eli Lederman, CEO of Turquoise, added: “Our partnership with London Stock Exchange Group is an important transaction for the next stage of Turquoise’s development. In our first 18 months of operation we have achieved a pan-European footprint in both lit and dark trading. With the support of London Stock Exchange Group we will be able to simplify our operational structure, attract a wider network and expand the platform’s product base.”
The transaction is expected to complete mid-February 2010.
Turquoise will continue to be regulated by the FSA as an MTF under MiFID.