NYSE Euronext (NYSE Euronext: NYX) and BIDS Holdings, L.P. (BIDS Holdings), today announced their intention to form a joint venture designed to improve execution quality and access to liquidity in block trading. Once formed, the joint venture will be open to all New York Stock Exchange (NYSE) members and accessible through BIDS Trading, a registered alternative trading system (ATS), which will become an NYSE member. The joint venture will operate as a facility of the NYSE and be subject to regulatory oversight by NYSE Regulation.
NYSE Euronext and BIDS Holdings will each have a 50% ownership stake in the joint venture, whose formation is subject to approval by the U.S. Securities and Exchange Commission and certain corporate authorizations. In addition, NYSE Euronext will make an undisclosed investment in BIDS Holdings, becoming the newest investor in the company, and joining the current owners: Bank of America, Bear Stearns, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Knight Capital Group, Lehman Brothers, Merrill Lynch, Morgan Stanley and UBS.
"The joint venture is a timely response to customer needs and reflects our commitment to diversification and customer choice," said Duncan Niederauer, president and co-coo of NYSE Euronext. "We look forward to working with BIDS Holdings and our key sell-side constituents, which represent half of NYSE-listed volume traded on the Exchange, to re-aggregate block liquidity. We believe that this innovative co-branded approach with BIDS Holdings will serve our clients and markets well by bringing block-size orders back into contact with active traders, algorithms, and retail flow."
"We welcome this partnership with NYSE Euronext and expect that the joint venture will address the current inefficiencies in block trading such as market fragmentation," ceo of BIDS Trading, Tim Mahoney, said. "Moreover, this initiative is an endorsement of our efforts to build the leading block interest discovery and trading system in the U.S. Volume on BIDS Trading has been growing significantly, reaching more than one billion shares* in less than six months of trading."
"The announcement of this joint venture is the product of exceptional levels of cooperation and brainstorming amongst the broker-dealer community and the NYSE," said Bill Neuberger, chairman of the Board of BIDS Holdings and global head of product development for Morgan Stanley Electronic Trading (MSET). "The resulting innovative market structure, in combination with the current value proposition of BIDS Trading, should become very important to our clients in their quest for best execution of block-sized trades."
BIDS Holdings is the parent company of BIDS Trading, the ATS designed to increase competition in the U.S. equity block trading market by creating a highly liquid anonymous electronic marketplace, open to all market participants.
NYSE Euronext, a holding company created by the combination of NYSE Group, Inc. and Euronext N.V., operates the world’s largest and most liquid exchange group and offers the most diverse array of financial products and services.