The Boston Stock Exchange (BSE) has shut down the Boston Equities Exchange - the all-electronic equities trading platform it set up with five Wall Street banks - less than a year after the market opened for trading.
BSE said in August 2005 that it was teaming with Citigroup, Credit Suisse, Fidelity Brokerage Company, Lehman Brothers and Merrill Lynch to launch the BeX.
The platform was based on technology from Citi subsidiary Lava Trading and Atos Euronext Market Solutions.
Citi's C Thomas Richardson was named president of the BeX unit a month before the operation opened for trading in December 2006. At the time the BSE said the new market "offers a choice for executing equities in a Reg NMS world".
But in today's statement BSE says the BeX venture "struggled to gain market share in large part due to the overall strength of market incumbents".
"We are disappointed that BeX was not able to become competitive in today's marketplace and perform as well as other ventures of the Boston Stock Exchange," says BSE chairman and CEO Michael Curran. "We want to emphasise that the BSE remains a committed member of the national market system."
The BeX shut down will affect around 40 employees, says BSE. Of those some will be reassigned to other ventures, some will remain on through the transition and those whose positions are eliminated will receive severance packages.
Separately, the SEC reported that the BSE and its former president, James Crofwell, had agreed to settle charges that they failed to enforce rules preventing specialists from trading for their own accounts ahead of marketable customer orders.