Lehman Brothers, Credit Suisse First Boston, Fidelity Investments and Citigroup along with its Lava Trading unit are in advanced talks to create an electronic stock trading facility in Boston, according to a New York Times report.
Citing people briefed on the plan, the NYT says the new exchange which will be structured in a similar way to the Boston Options Exchange, which has so far declined to comment on the speculation.
At the same time, Citigroup, Morgan Stanley, Credit Suisse First Boston and UBS Securities are expected to confirm that they are each buying a stake in options mart Philadelphia Stock Exchange (PHLX), says the report.
The four banks reportedly held discussions with the PHLX last month. Merrill Lynch and Citadel Derivatives acquired ten per cent stakes in PHLX in June for a rumoured $7.5 million apiece.
NYT says the two deals are a reaction against the might of the New York Stock Exchange and of Nasdaq, both of which are merging operations with electronic exchanges and ECNs.