US trading systems vendor Nyfix is shutting down its Fusion order management business and moving all users of the technology to Citi's Lava ColorPalette platform.
Nyfix will move around around 16 regional sell side brokers from its Fusion system to the Citi platform.
In exchange, Citi will offer access to Nyfix's full suite of electronic trading services - including Marketplace, Nexas algorithms and the Millennium ATS - to the new, as well as existing clients, through the Lava ColorPalette OMS.
Howard Edelstein, CEO, Nyfix says the agreement with Citi "has been designed with the best interests of our clients in mind".
"Lava technology was the leading choice of our Fusion clients among OMS providers and we are happy that we will be able to provide them with a smooth transition to that solution," says Edelstein.
The two firms say they will form a dedicated team to manage the transition.
Nyfix's decision to exit its Fusion OMS business comes after the vendor reported a second quarter net loss of $7.4 million - compared to $5.0 million for the year ago period - following restructuring costs and the need for a $1.6 million contingency relating to a botch up in collecting Nyse linkage fees from clients.
Nyfix, which posted its Q2 results in August, said it began to incur "significant linkage fees" from the Nyse to route orders to other market centres with improved prices on 5 March, when Regulation NMS for exchanges went live in the US. But due to "difficulties" in capturing trade information for Nyse outbound routed orders from 5 March through to 31 May, it was unable to notify clients of pass-through charges and so had to pick up the tab.
Nyfix was also hit with also hit with "transitional rebuilding and remediation costs" of $1.7 million during the quarter, along with $1.4 million relating to an on-going SEC investigation into its financial reporting.
In today's statement Nyfix says the decision to exit its Fusion OMS business enables it to devote more resources to clients of its FIXTrader desktop trading system and its Marketplace and Transactions businesses.
"The ability to better focus our energies will ultimately translate into more integrated Nyfix offerings and increased service and support for all of our customers," says Chris Walsh, head of Nyfix's OMS division.