The Archipelago Exchange (ArcaEx) is planning to establish one of the most highly-developed electronic auction markets in the world, pending a successful IPO.
The ECN-turned-stock exchange – hoping to have its IPO soon – was coming closer to taking that giant step recently prior to the quiet period of the stock offering, according to industry sources. However, it turned down a deal to acquire PDQ – the acronym for Procedure Derived Quotes – an innovative system built by ExchangeLab.
ExchangeLab is a small technology incubator in New York City, run by former NYSE technology executive Chris Keith. Despite the change of plan, the talks foretell a period of massive spending on elaborate systems by ArcaEx in a post-IPO environment, trading executives say.
PDQ is regarded as a more sophisticated version of the failed Primex trading system for listed and OTC stocks. The main idea behind PDQ is the centralization and replication of trading interest on a floor similar to the NYSE's.
ArcaEx declined to comment, citing the IPO quiet period rules. Chris Keith of ExchangeLab said he could neither confirm nor deny the story.
