US trading venue Direct Edge will start trading as an official stock exchange from today, after completing its migration to a new technology platform and data centre.
From Wednesday, EDGX and EDGA, the firm's former electronic communications networks (ECN), will start trading Tape A, B and C securities from data centre provider Equinix's NY4 facility in Secaucus, New Jersey, as an exchange. As a result, the EDGX and EDGA ECNs as well as ISE Stock Exchange, which was purchased by Direct Edge at the end of 2008, will be decommissioned and no longer able to accept order entries. Functionality that was available on the ISE Stock Exchange, such as its Mid Point Match service, will be merged with EDGX and EDGA in due course.
For the time being, the exchange will continue to maintain its API translator at its legacy data centre to enable the retransmission of orders to its new platforms at the NY4 data centre.
Direct Edge was originally scheduled to reclassify as an exchange in May, but delayed until July to allow customers and vendors more time to connect. Direct Edge first filed for exchange status in May 2009 to help it better compete with rival exchange groups BATS Global Markets, NYSE Euronext and Nasdaq OMX.
In March, Direct Edge CEO William O'Brien told theTRADEnews.com that as well as improving technology and ability to launch new products, the migration to exchange status would also allow the firm to reduce clearing fees by using NSCC, the equities clearing division of post-trade facility the Depository Trust & Clearing Corporation. ECNs act as counterparties to both buyer and seller on their platforms, and so need to clear through a third party.