The London Stock Exchange and pan European trading facility
Turquoiseare weeks away from a merger,
according to reports.
The companies have been in talks since early this month which
could lead to
Turquoise merging with the London Stock Exchange's Baikal
business,
according to the Financial Times.
Baikal, which is still in development, is what is known as a
dark pool. Dark pools enable companies to carry out large block
trades without reporting the prices until they are complete. It is
currently using the London Stock Exchange's
Tradelect core trading platform, which is currently being replaced
by one from Millennium IT, which the exchange acquired
recently.
The London Stock Exchange has come under pressure since the
introduction of
pan-European legislation known as MiFID. This liberalised the
trading sector and
brought about new venues, such as Turquoise which was set up by
major investment banks.
PJ
Di Giammarino, CEO at financial services think-tank JWG-IT,
said a deal of this sort would be no surprise.
"
Since the introduction of MiFID there has been an oversupply of
venues with different business models. There is a need for
consolidation," added Giammarino.
Baikal's development is still conceptual and
a merger with Turquoise would give it a technology platform.
Turquoise started building a trading platform using off-the-shelf
technologies in October 2007. It completed it in March
2008.
A London Stock Exchange spokesman said the talks were ongoing
and they were going well, but he would not comment further.