The London Stock Exchange and pan European trading facility Turquoise are weeks away from a merger, according to reports.
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.