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GETCO Holding Company LLC (GETCO) and Knight Capital Group Inc. (Knight) (NYSE:KCG), which earlier this week announced shareholder approval of the merger that will form KCG Holdings, Inc., today announced the combination of each firm's Designated Market Maker (DMM) units. Effective July 2, 2013, the listed securities of the New York Stock Exchange (NYSE) and NYSE MKT DMM units of Knight and GETCO will trade through one broker-dealer, Knight Capital Americas LLC.
Together, the DMM units will have responsibility for approximately 1551 NYSE and NYSE MKT listed securities, making the firm the largest DMM by number of DMM assignments. Ultimately, the Knight and GETCO DMM units will be combined into a single unit. The transition is expected to be completed by the end of July.
"Our first priority is to ensure the seamless integration of Knight and GETCO's Designated Market Maker Units, while maintaining the superior client service and in-depth market intelligence our listed companies have come to expect," said Todd Abrahall, Managing Director of GETCO's DMM Unit. "We look forward to leveraging the enhanced capabilities of our combined floor operations after the integration is complete."
"Our listed issuers and investors will be very well served by this transaction, which brings together two exceptional DMM units to form one unit that is very well positioned to serve customers across a wide range of sectors and geographies," said Joseph Mecane, EVP & Head of U.S. Equities at NYSE Euronext. "The combined DMM has extensive market-making expertise, a strong track record of technology innovation and exceptional relationships with our issuers. We look forward to working with both Knight and GETCO to ensure a smooth and effective transition."
The DMM unit of Knight is responsible for approximately 512 NYSE and 139 NYSE MKT-listed securities. The DMM unit of GETCO serves approximately 900 NYSE-listed securities. Knight will maintain its current order handling protocols for the Exchange Traded Funds trading businesses following the close of the transaction.
DMMs are accountable for maintaining a fair and orderly market for NYSE and NYSE MKT-listed securities via physical and electronic auctions. DMMs facilitate price discovery and act as dedicated liquidity providers, which results in tighter quoted spreads, deeper markets and greater price stabilization for the securities they service.
DMMs are required to meet stringent depth and continuity standards. For more information, go to: http://usequities.nyx.com/listings/dmms.
