The newly merged Bank of America Merrill Lynch is scrapping the direct market access platform developed by Merrill and using one owned by Bank of America. As part of the integration of the firms’ electronic trading departments, the combined entity will mothball Merrill’s X-Trade in favor of BofA’s Instaquote.
Merrill’s X-Trade, developed internally, never gained sway among clients and could not compete with platforms like Goldman Sachs’ REDIPlus or Townsend’s RealTick (owned by Barclays). “The underlying technology and infrastructure for InstaQuote was better and more scalable,” said Roger Anerella, head of global execution services in the bank’s equities global markets division.
InstaQuote, which BofA acquired in 2004 from Direct Access Financial Corp., was a proven third-party trading platform. Several years ago, according to BofA, the platform had grown to more than 6,000 users, mostly from small and midsize hedge funds. “It’s a good solid prime brokerage product with a top-notch tech group,” said William Harts, former head of electronic trading services and equity strategy for Banc of America Securities, who now consults for financial services companies and exchanges. Several dozen people from the original Texas-based technology group that BofA gained as part of the InstaQuote acquisition five years ago still develop, run and support the trading platform.
BofA-Merrill is continuing to offer clients a version of the Portware EMS, which is geared to portfolios, as part of a deal put in place two years ago. The broker-dealer’s algos and trading analytics are also integrated into all major buyside order management systems, proprietary OMSs and broker-neutral EMSs.
