Pan-European electronic trading venue Equiduct could be forced to close down after being told that its largest shareholder Citadel Securities will stop market-making on the platform within weeks, according to press reports.
Citing sources, the Financial Times says that Citadel warned Equiduct of its plans to withdraw at a board meeting on Tuesday.
Although Equiduct is bidding to attract new investors, hopes of raising money from Deutsche Börse appear to have been dashed and closure is the most likely outcome, says the FT, adding that another board meeting will take place in the coming weeks.
Citadel's decision is part of a wider strategic shift that sees the firm pull back from trading on behalf of European clients on European exchanges because of frustrations with the regulatory landscape.
Equiduct was one of a wave of trading venues to emerge in the wake of MiFID, the European regulatory overhaul designed to provide competition for national exchanges.
However, after a promising start, the market has consolidated in recent years, with the merger of Chi-X Europe and Bats Europe, the LSE's acquisition of Turquoise and the closure of Nasdaq OMX's Neuro.
Citadel pullout leaves Equiduct in limbo - FT