NYSE Euronext, an equity exchange, has entered into a definitive agreement to acquire Metabit, a Tokyo-based provider of high performance and exchange traded market access products throughout Japan and Asia.
The direct market access (DMA) will get a boost in India. Metabit was among the 20 DMA providers in the country.
Normally, trading on the order book is restricted to broker dealers and market making firms that are members of the stock exchanges. Under DMA, which is only used by institutional players in India, trader will control the way a trading transaction is managed themselves rather than passing the order over to the broker's own in-house traders for execution.
Today, DMA is often combined with algorithmic trading giving access to many different execution strategies.
The BSE and National Stock Exchange started high-speed trading in 2009, about a year before the Tokyo Stock Exchange Group Inc. introduced its Arrowhead platform that cut processing to 5 milliseconds from 2 to 3 seconds. Australia's ASX Ltd. in December moved to a platform that reduced the average time to 250 microseconds from 3 milliseconds. A millisecond is one thousandth of a second and a microsecond is one millionth.
Metabit will operate as a product line within the NYSE Technologies portfolio. The transaction is expected to close in third quarter of 2011. Terms of the acquisition were not disclosed.
Skilled with in-depth experience and understanding of financial markets in Asia, Metabit specializes in streamlined, low-latency technology solutions that enable industry-leading access to financial markets across Asia.
Metabit's products connect buy-side order flow with sell-side exchange participants and are designed exclusively for low latency direct market access (DMA) and exchange connectivity to markets through-out Asia. The company is headquartered in Tokyo, with offices in Australia and Hong Kong. Metabit has built a trading community of more than 140 trading firms in Asia.
"Metabit's products are built in Asia for Asia, and this combination fits our strategy, our connectivity business and our customer interests," said Stanley Young, CEO of NYSE Technologies.
Young further said that Japan and Asia are priorities for NYSE Euronext. Daniel Bürgin, CEO of Metabit, said: "Our combination with NYSE Technologies will be highly beneficial to delivering innovative solutions to our customers and to accelerate achieving our long-term business goals. We remain committed to our local business focus and service quality in Japan and throughout Asia, whilst being strengthened by NYSE Technologies' product suite. The people and products of our combined companies will provide significant expertise and scale to NYSE Technologies' business in the region."
Upon closing, Bürgin will head the NYSE Technologies Asia business and report to Young. Peter Tierney, managing director of NYSE Technologies will become the chief operating officer of the combined business in Asia, and together they will lead the business operations.
