Global market maker Getco today announced the acquisition of the Designated Market Maker ("DMM") business from Banc of America Specialists, Inc., BofA Merrill Lynch's New York Stock Exchange ("NYSE") DMM unit.
The acquisition significantly expands GETCO's existing market-making services and responsibilities at the NYSE, a wholly owned subsidiary of NYSE Euronext (NYX). Terms of the deal were not disclosed.
"NYSE has brought the floor model into the digital age by synthesizing best-in-class technology with the unique perspective of the individual market maker," said Daniel B. Coleman, Global Head of Equities and Client Services for GETCO, LLC. "NYSE's high-tech, high-touch model is a strong fit for our approach to market making, and we are pleased to expand the services we offer to a wider range of investors and issuers. Many companies are looking for a way to navigate today's complex marketplace and our global scale allows us to provide them with increased liquidity, better pricing and unique market insights."
Upon close of the transaction, GETCO will be the DMM for approximately 650 companies and a total of 850 securities at the NYSE, making the firm the second-largest DMM by number of DMM assignments. GETCO will assume responsibilities for its new DMM assignments on a rolling basis throughout the month of December.
"This transaction underscores GETCO's growing presence to our market and its commitment to issuers, investors and our entire community," said Lawrence Leibowitz, NYSE Euronext Chief Operating Officer and Head of Global Cash Markets. "GETCO has demonstrated strong performance as a NYSE Designated Market Maker, and has an exceptional track record of market-making expertise, technology innovation and relationships with issuers. We are extremely grateful to BofA Merrill Lynch for its outstanding service to our market and customers, and we look forward to working with both companies toward a smooth and orderly transition."
Designated Market Makers are accountable for maintaining a fair and orderly market for NYSE-listed securities via physical and electronic auctions. DMMs facilitate price discovery and act as dedicated liquidity providers, which results in tighter quoted spreads, deeper markets and greater price stabilization for the securities they service. DMMs are required to meet stringent NYSE depth and continuity standards.
Since being selected as a NYSE DMM in February of 2010, GETCO has established a strong track record of providing value to listed companies through price improvement, deep liquidity and best pricing as measured by percentage of time at the national best bid and offer ("NBBO"). GETCO has also served as DMM for more than 30 high-volume issues, including General Motor's $20.1 billion initial public offering ("IPO") in November of 2010, the largest IPO on record in the United States.
GETCO is currently a DMM and Supplemental Liquidity Provider ("SLP") on the NYSE, a registered market maker on the NYSE Arca, NASDAQ and BATS exchanges, and a liquidity provider on more than 50 exchanges and trading venues around the world. GETCO is consistently among the top five participants by volume on NYSE Arca, NYSE Arca Options, NYSE Liffe U.S., CME, Eurex, and various other equities, futures and options markets.