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INTERVIEW-Liquidnet in tie-up talks with Asian exchanges

Published 04/11/2011, 11:38 PM
Updated 04/11/2011, 11:44 PM
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* Looking to offer dark pool services to exchanges

* Eyeing possible expansion into Philippines, Thailand

* Trading on Liquidnet Asia hit $4.95 bln in Q1

SINGAPORE, April 12 (Reuters) - Liquidnet, a trading platform for asset managers, said it was in preliminary talks with a number of Asian stock exchanges about possible tie-ups.

Several Asian bourses are looking at potentially using U.S.-based Liquidnet's "dark pool" services which enable institutional investors to trade large blocks of shares away from the public eye.

"We're having preliminary conversations with a number of exchanges, including some in Asia," Liquidnet's Asia-Pacific managing director Lee Porter said in an interview with Reuters.

Consolidation between global exchanges and growing competition from alternative trading venues meant many bourses were having to look at offering a wider range of services, he said.

"The exchanges have to look at what their product mix is, look at whether they want to build other product offerings themselves or whether they want to find a partner," said Porter.

"Common sense would say that partnerships, if they're structured correctly, can be really powerful."

Last week, the failure of the proposed merger between the Singapore Exchange and ASX prompted analysts to say the bourses risked losing their role as global players in the exchanges space unless they looked for other tie-ups and joint ventures. [ID:nL3E7FB0BG]

"Organic growth is going to be hard for these exchanges, particularly on the equity side," said Porter.

Liquidnet has already signed a link-up agreement with the Swiss Exchange, which is expected to go live later this quarter.

In Asia, the platform now has more than 200 institutional investors signed up as members, who are able to use it to trade in Japan, Australia, Singapore, South Korea, Hong Kong, Indonesia, Malaysia and New Zealand.

Porter said Liquidnet was also looking to expand into the Philippines and Thailand although India's regulatory regime means that's the one big Asian market they can't yet tap.

"We'll be looking at new markets where it makes sense and adding to the product mix over time," he said.

Liquidnet also reported on Tuesday that trading on its platform in Asia hit $4.95 billion in the first quarter of this year, a 32 percent rise on the previous year. (Reporting by Rachel Armstrong; Editing by Vinu Pilakkott)

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