Nasdaq has agreed to acquire Chi-X Canada, an alternative trading system for the Toronto Stock Exchange and TSX Venture Securities, from Chi-X Global.
The acquisition is intended to give Nasdaq direct access to the Canadian equities market, expanding its North American trading business beyond just the US, where it currently already operates trading venues in cash equities, options, commodities and fixed-income.
Chi-X Canada has two platforms – Chi-X Canada and CX2. Both offer customisable smart order routing and trading models for post-trade attribution and advanced order types, while also offering trade reporting, risk management tools and direct connectivity.
The acquisition is intended to improve the trading experience for customers by creating better unity between technology and functionality between US and Canadian trading venues.
Tal Cohen, CEO of Chi-X Global, said: “Nasdaq and Chi-X Canada have both demonstrated their commitment to market innovation and efficiency.”
He added: “We believe Nasdaq is well positioned to enhance Chi-X Canada’s current capabilities and to capitalise on new product and asset class opportunities, while maintaining Chi-X Canada’s core values of cost-effective and client-driven solutions.”
Tom Wittman, executive vice president and global head of equities at Nasdaq, added: “This is a significant acquisition for Nasdaq, as Canada’s GDP has grown more than 50 percent in US dollars, and 16 percent inflation-adjusted, since 2005.”
He added: “We look forward to working with the Chi-X Canada clients to develop new products and services to help them better navigate the global capital markets.”
Terms of the acquisition have not been disclosed. Over 12 months, Nasdaq intends to work with Chi-X Canada’s clients to aid a seamless transition to its own INET exchange technology.
The deal is expected to close in Q1 2016, and is expected to be accretive to Nasdaq’s earnings, excluding transaction-related costs.
