US trading venue Direct Edge now expects to complete its transition to exchange status by Q2 this year, as it awaits final approval from US regulator the Securities and Exchange Commission (SEC).
The electronic communications network first filed for exchange status for its two trading platforms – EDGX and EDGA – in May last year to help it better compete with rival exchange groups BATS Global Markets, NYSE Euronext and Nasdaq OMX. It had originally targeted a Q4 2009 launch but revised this following administrative issues.
Following the filing of the registration, the SEC published Direct Edge’s proposal for comment in September. A spokesman for Direct Edge told theTRADEnews.com that regulatory approval is expected soon. After authorisation, the venue will need 60 days to make the transition to exchange status.
As a result, Direct Edge has targeted the end of Q2 to launch as an exchange. BATS Exchange, a rival trading venue, applied for exchange status in November 2007 and finally launched as an exchange in October 2008.
EDGA and EDGX offer different pricing structures: EDGX offers rebates for adding liquidity and charges fees for removing liquidity, while EDGA offers rebates for removing liquidity and charges for adding liquidity.
Direct Edge’s matched market share of all US equities trading was 10.26% in January, while BATS Exchange’s was 10.2%.