ConvergEx has agreed to acquire the US electronic agency execution business of Nyfix Transaction Services, comprising the Millennium Alternative Trading System (ATS) and its direct market access (DMA) and algorithmic products.
The deal is contingent upon the completion of Nyse Euronext's $144 million acquisition of Nyfix Inc. - which is expected to close before the year-end - and does not include the loss-making European Transaction Services outpost.
Once the deal is completed, Millennium will be ConvergEx's third in-house alternative trading system and will be independently operated alongside its streaming institutional crossing platform, VortEx, and dark block trading system, ConvergEx Cross.
In making the move, ConvergEx chief Carey Pack, professes himself unconcerned about ongoing regulatory scrutiny of dark pools and alternative trading systems.
"ConvergEx believes in the many benefits of non-displayed liquidity for all market participants and supports efforts being taken to promote more transparency in this rapidly evolving and important space. ATSs encourage competition and improve overall execution quality by reducing information leakage, market impact and execution expenses.
"In addition, because different execution venues attract unique types of liquidity, ConvergEx believes that it is a benefit to clients to offer numerous sources of in-house liquidity.
The acquisition also provides a larger footprint in the sell-side, providing "significant cross-selling opportunities" he says.
Brian Carr, currently the head of Nyfix's US Transactions Services business, will join ConvergEx in a senior management position and will continue to be responsible for the day-to-day operations of the business.
Nyfix reported widening third quarter losses last week, including a $2.2 million loss against the Euro Millennium platform. In making its bid for the company in August, Nyse Euronext said it would "explore various alternatives" in dispensing with the Transactions Services business.