Citigroup to re-launch ECN NexTrade as OnTrade
NEW YORK (Reuters) - Citigroup Inc. (NYSE:C - news), the largest U.S. bank, plans to launch its own electronic stock-trading network that could potentially divert trading volume away from the New York Stock Exchange and Nasdaq Stock Market Inc., the Wall Street Journal reported on Wednesday.
Jim O'Donnell, head of U.S. equities at Citigroup, told the paper the bank seeks to create "flexibility" for itself, clients and other broker-dealers.
Citigroup officials said the new electronic network will be run separately from its own trading business and will be accessible to other firms that want to buy or sell stocks.
Citi's venture, to be rolled out this spring, follows the bank's acquisition last week of OnTrade Inc., an electronic communications network that had been operated by closely held NexTrade Holdings Inc. of Clearwater, Florida.
Big brokerage firms are trying to protect themselves in case stock exchanges, most of whom are converting from member-owned organizations into publicly traded, for-profit companies, try to raise the cost of trading, the paper reported.
The NYSE, which will soon go public after its merger with Archipelago (AMEX:AX - news), and electronic exchange Nasdaq (Nasdaq:NDAQ - news) recently announced fee increases.
Last year Citigroup and other Wall Street firms purchase stakes in the Philadelphia Stock Exchange and an electronic venture run by the Boston Stock Exchange. These investments began after the NYSE and Nasdaq announced in April they were buying large electronic-trading venues that would give them a dominant share of the market.
The new venture will help reduce Citigroup's transaction costs, a person familiar with the bank's strategy told the Journal. Citigroup's move also could provide it more revenue from distribution of market data. |
