Banks, trading firms take minority stake in Chi-X
10 January 2008 | 12598 views | 0
A group of 13 banks and trading firms has taken a minority equity stake in Instinet's MiFID-compliant alternative trading facility, Chi-X Europe.
Instinet said in April - when Chi-X Europe was launched - that it was seeking equity partners.
In today's statement the firm, which is owned by Japanese bank Nomura Holding, says investment banks BNP Paribas, Citi, Credit Suisse, Fortis, Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, Société Générale and UBS have made investments in Chi-X as well as Chicago-based hedge fund Citadel and trading firms Optiver and Getco Europe.
The consortium will acquire a minority holding in Chi-X Europe, with Instinet retaining a majority stake in the ATS. Financial terms were not disclosed.
Chi-X Europe offers trading and clearing services that completely bypass Europe's existing exchanges and central counterparty infrastructure. The system is based on Instinet's Continuous Block Cross (CBX) platform, which has been redeveloped for the European market to help sell-side firms address the best execution requirements of the European Union's MiFID directive.
In November the platform was granted a trade reporting licence by the UK's Financial Services Authority (FSA) to help clients meet post-trade transparency requirements under MiFID.
The system currently offers trading in stocks in the leading Dutch, German, UK, French and Swiss equity indices and says it will continue to expand the universe of eligible stocks in 2008.
Commenting on the new equity investments, Tony Mackay, president and MD of Instinet Europe, says: "That these firms are willing to take an equity stake in Chi-X Europe is a testament to our common vision of a more efficient European equity market resulting from cheaper, faster and smarter trading."