UBS has bought into the Chi-X Global model, acquiring an equity stake in the international exchange operator and trading technology provider.
With its new minority shareholding, the Swiss bank becomes the sixth member of the firm’s ownership consortium, which includes founding parent Instinet and recent investors Bank of America Merrill Lynch, GETCO, Goldman Sachs, Morgan Stanley, and Quantlab Group LP.
“UBS has a long-standing commitment to promote the benefits of competition, innovation, investor choice and market efficiency – which ultimately leads to greater liquidity and lower trading costs for our clients.” said Mike Stewart, head of global equities at UBS. “Given our reach and position in the equity markets across the globe, it made sense to become an active participant in Chi-X Global’s model.”
In October this year, Chi-X Global confirmed that five external investors had acquired minority stakes in the exchange provider from Instinet, owned by Japanese bank Nomura.
“The consortia-based ownership model is ideal for us, not unlike the mutual models that exchanges used to have,” said Tal Cohen, CEO of Chi-X Global, at the time of the initial consortium announcement. “It can be hard for exchanges to run a full for-profit model.”
Instinet remains Chi-X Global’s majority shareholder. Financial terms of the UBS transaction were not disclosed.
“We are pleased to welcome UBS to our group of world class, distinguished equity partners,” said Cohen. “As we continue to expand our global presence through new product offerings and strategic growth opportunities, we look forward to working closely with our investors and market participants globally.”
Chi-X Global operates alternative trading platforms in Japan and Canada, and launched an equities exchange in competition with the Australian Securities Exchange on 31 October. The firm also operates a joint venture dark pool with the Singapore Exchange, which offers trading in leading stocks listed in Hong Kong, Japan and Singapore. Its Chi-FX joint venture with Brazil’s BM&F Bovespa exchange is scheduled to go live next year.
Instinet launched the Chi-X Europe pan-European trading multilateral trading facility in 2007, and was the platform’s largest single shareholder until last month’s sale of that operation to BATS Global Markets.