Turquoise expands bank share roster

THE London Stock Exchange (LSE) yesterday sealed a deal with three leading banks to sell a nine per cent stake in Turquoise, the trading platform it bought at the end of last year.

Barclays, JP Morgan Cazenove and Nomura have each snapped up three per cent of the venture, which was merged with the LSE’s existing dark pool trading facility Baikal.

The three firms join the share register alongside the nine investment banks which originally set up Turquoise in 2008 – Goldman Sachs, Citi, Credit Suisse, Morgan Stanley, Deutsche Bank, UBS, Merrill Lynch, Société Générale and BNP Paribas.

The nine founders now hold a combined 40 per cent of Turquoise, while the LSE retains a controlling 51 per cent stake. “Our desire is to work with all participants to grow the market for trading European shares and Turquoise’s share of that marketplace in both lit and dark [trading],” said David Lester, chief executive of Turquoise.

The extension of the venture’s share register marks a turnaround for the LSE, whose failure to offer competitive fees and improve services for its biggest banking customers was the main reason why Turquoise was set up in August 2008.

But Xavier Rolet, who took over as chief executive of the LSE from Dame Clara Furse last year, has been keen both to smooth over relations with the banks and to push forward with expansion in the European securities trading market, where Turquoise has a strong existing footprint. At the time of the acquisition, Rolet said: “The European market place for trading securities has scope to become more efficient and to grow significantly in the coming years… With the introduction of new trading technology and a neutral structure, we believe [Turquoise] is now well positioned to be an agent of change and to capture a healthy slice of the market’s growth potential.”