TD Bank Group and TD Cowen’s prime brokerage and outsourced trading division are to diverge on mutually agreed terms months after their merger.
According to sources familiar with the matter, the pair have communicated to clients that they have jointly concluded it would be in the best interests of clients if the prime brokerage and outsourced trading business were divested to a partner more “strategically and geographically aligned” to the platform.
TD Bank Group and TD Cowen declined to comment.
TD Bank Group completed its $1.3 billion Cowen acquisition in March. At the time, the bank said the acquisition would create an integrated North American dealer that would significantly advance its growth strategy in the region through the addition of Cowen’s US equities sales trading, and execution, as well as research capabilities.
The news follows an internal memo from TD Cowen earlier this week confirming that it would be shuttering its digital assets unit, Cowen Digital, two years after its launch.
The communication, seen by The TRADE, was signed off by 11 team members, including managing directors Drew Forman, head of Cowen Digital; Eric Rose, head of execution; and Keith Coyne head of product and strategy.
The memo reemphasised the importance of “trusted counterparties who understand the needs of institutional investors” and expresses the unit’s need to operate from “a different home” going forward.
The latest move appears to confirm the broadly recognised challenge of merging bank and brokerage cultures.