Direct Edge to convert to stock exchange status

Direct Edge to convert to stock exchange status

US stock trading venue Direct Edge has filed applications with the Securities and Exchange Commmission to convert into two national securities exchanges later this year.

The broker-backed venue has filed two Form 1 applications with the SEC in order to register its ECN trading systems, EDGX and EDGA, as facilities of two newly-created national securities exchanges.

Direct Edge broke the ten per cent threshold for matched market share in US stock trading last month for the first time, and now claims to be the third-largest stock market operator in the world.

In a letter to stakeholders, CEO William O'Brien projects that the transition to exchange status will coincide with the launch of the firm's next-generation technology platform from a new Equinix "NY4" facility in Secaucus, New Jersey.

He says: "We currently anticipate user acceptance testing to begin in the 3rd quarter of 2009, with a launch date in the 4th quarter, pending SEC approval of our applications."

The firm anticipates that the move will add $40 million of annual revenue from market data, and save $8 million to $10 million a year in costs.

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