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Why Do Exchanges Own Multiple Licenses? It's Not Hard To See, Look at the SEC

In this recent research note, Sandler O'Neill + Partners, L.P. Principal Richard Repetto examines why the public exchange operators hold multiple licenses and that rationale behind this phenomenon.

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January 21, 2010

ConvergEx Goes Three Deep

By James Ramage

The agency brokerage ConvergEx is running the recently purchased Millennium ATS alongside its two other in-house dark pools. Millennium operates independently alongside ConvergEx's streaming ATS for institutions, VortEx, and its dark block-trading platform, ConvergEx Cross.

ConvergEx obtained Millennium when it bought NYFIX U.S. Transaction Services in November. The purchase lets ConvergEx access sellside liquidity, said Joseph Velli, the chairman and CEO of ConvergEx Group.

For dark orders, ConvergEx's algos and smart routers will first attempt to find a match within its in-house ATSs, Velli said. If none is found, the order then will be routed out to the marketplace. Velli expects Millennium to greatly increase the firm's dark pools' volumes. VortEx traded an average of 10 million shares a day in November, single-counted, Velli said. That's up slightly from October. ConvergEx does not report monthly volume numbers for ConvergEx Cross.

For its part, NYFIX Millennium executed on average 16 million shares a day, single-counted, in October. It had been averaging just under that amount since August, according to the most recent dark pool numbers assembled by Rosenblatt Securities. But Millennium averaged 27.1 million shares a day, single-counted, in October 2008.

Launching another non-displayed pool should boost ConvergEx's volume, by giving clients more options, said Sang Lee, an Aite Group consultant.


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