Investment banks developing electronic trading platform

23 July 2007

Several investment banks are working together in developing an electronic trading platform for unregistered securities, it has been reported.

Lehman Brothers, Morgan Stanley, Citigroup and Merrill Lynch are among the banks working on the platform which is due to be launched in September, according to a report in the British daily the Financial Times.

The new platform is intended to prevent JP Morgan and Goldman Sachs from dominating the electronic trading market for unregistered shares, the report added.

News of the move follows Goldman recently signing a deal with Oaktree Capital, a hedge fund group, and Apollo Management, a private equity firm, to deal in unregistered shares on its GSTRuE private trading system.

Unregistered shares will become an increasingly popular method for alternative asset managers to raise capital without complying with the required disclosure when selling stock an initial public offering, the report said.

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