NYSE Working to Integrate NYFIX Business

Following the recent closing of its acquisition of NYFIX, NYSE Technologies, a wholly owned subsidiary of NYSE Euronext, is working to integrate the company’s FIX business, which includes the NYFIX Marketplace and the FIX software business.

“We’ve been really pleased with the way the integration has been going with the core NYFIX business—the Marketplace and ioinet,” says Stanley Young, CEO of NYSE Technologies and co-CIO of NYSE Euronext.

“We are excited about the opportunities of the NYFIX acquisition and bringing the buy and sell side communities together. “This is a powerful addition to our portfolio,” says Young.

He adds that there was little overlap between the two businesses apart from the FIX gateway business which is a competitor with the exchange’s TransactTools business that was acquired a couple of years ago. “We are doing some consolidating of those businesses to become one of the largest FIX gateway providers when combined,” says Young.

But what was most valuable to NYSE Technologies was the addition of NYFIX’s large buy side community. “We’re looking to welcome the buy side community into the NYSE Technologies family and look to see where we can provide value-added services to them from the remainder of our portfolio,” he notes.

In particular Young says the buy side could benefit from the exchange’s market data and feed handling technology solutions as well as its transaction gateway products that currently power its risk management gateways. “We’d like to quickly extend our portfolio to the buy side firms,” he adds.

For sell side firms that are part of the NYFIX community Young says the majority are users of the NYSE’s Secure Financial Transaction Infrastructure (SFTI) and he says they will join the two at the network level, “to make sure that traffic can flow between the two.”

“For those clients where it makes sense we will replace their NYFIX circuits with SFTI circuits in order to use the large SFTI infrastructure to communicate with clients,” Young says, adding that there could be potential savings for large players.

But he maintains that the NYFIX Marketplace will continue to be run, “ as a separate value-added community on the SFTI infrastructure.” NYFIX’s Transaction Services, the agency execution business which includes its direct market access, algorithmic products and the Millennium alternative trading system (ATS), is being acquired by ConvergEx, pending closing conditions and regulatory approvals.

“It was important from our perspective to sell the Millennium business here in the U.S. to ensure we didn’t any issues with being a broking entity and an exchange operatory,” explains Young.

While in Europe, NYFIX’s Euro Millennium dark pool has been shut down by NYSE Technologies with clients being encouraged to migrate to SmartPool, the exchange’s dark liquidity venue that is a partnership with several investment banks.

Stanley says that in addition the Swiss Block dark pool, which is owned by the SIX Swiss Exchange and is run on NYFIX Euro Millennium technology, will also be transitioned to the universal trading platform that runs Smart Pool.