US broker Knight Capital is set to make a strategic investment in Equiduct, the pan-European equities trading platform majority-owned by Citadel. Terms of the deal, which remains subject to Equiduct shareholder approval, were not disclosed.
Launched last April, Equiduct is one of several new trading platforms in Europe aiming to take advantage of the EU's Markets in Financial Instruments Directive (MiFID) and compete with incumbent exchanges.
In July Citadel Securities made a majority investment and outlined plans to turn it into a pan-European trading platform aimed at retail investors, distinguishing it from other MTFs such as Chi-X and Turquoise.
Recently Equiduct scored a coup in the wake of Nasdaq OMX's decision to shut its Neuro MTF, entering into exclusive talks to migrate clients to its platform.
Knight, like Citadel, has been increasing efforts recently to take advantage of the post-MiFID European landscape, launching Night Link in November.
The Equiduct investment, expected to close by the end of the month, sees Knight's Kee-Meng Tan, MD and head of the electronic trading group in Europe, join the Equiduct board.
As part of the transaction, Börse Berlin will maintain its current shareholding in Equiduct and continue to provide the platform with regulated market infrastructure and supervision.
Says Tan: "Retail investors have very few resources available to address challenges in the marketplace - fragmentation in European markets, the absence of a consolidated tape and limited price discovery. The Equiduct model, powered by cutting-edge technology, gives broker-dealers the ability to provide high-quality execution to their end clients at the best price."