US equities trading platform Direct Edge will launch a new trading system in Q4 this year, once the Securities and Exchange Commission (SEC) has approved the exchange applications for EDGA and EDGX, the firm’s two trading venues. The firm has chosen connectivity provider Equinix’s NY4 data centre in New Jersey as the primary location for the new system.
Direct Edge is in the process of filing two Form 1 applications with the SEC to register EDGA and EDGX as exchanges. Assuming the SEC approves the applications, Direct Edge plans to start user acceptance testing of the new exchange system in late Q2 or early Q3, then complete development of the system in Q3 and finalise acceptance testing in early Q4.
The firm will then retire the existing EDGA, EDGX and ISE Stock Exchange platforms simultaneously and launch the EDGA and EDGX exchanges on the new trading system based in the Equinix data centre.
The EDGA and EDGX platforms use the same technology infrastructure but EDGX employs a maker-taker pricing structure, while there is no charge for adding and removing liquidity on EDGA.
Direct Edge finalised the purchase of the ISE Stock Exchange from the International Stock Exchange on 23 December. It bought the exchange to take advantage of its technology and facilitate its transition to exchange status.
Direct Edge is currently using ISE Stock Exchange to display its quotes and to attain trade-through protection in the US National Market System. Until exchange approval for EDGA and EDGX is granted, ISE Stock Exchange will continue to operate as a facility of its former parent, the International Securities Exchange (ISE).