Match Now deal closed

TORONTO — MatchNow, Canada’s dominant dark trading platform, is being acquired by Chicago-based Cboe Global Markets Inc., a publicly traded holding company whose subsidiaries include the largest options exchange in the United States and third-largest stock exchange operator.

Terms of the deal, to be funded with cash on hand, were not disclosed.

The Canadian dark pool’s trading system is profitable, with $10 million in revenue last year, and the acquisition is expected to be immediately accretive to CBOE’s earnings, the company said.

MatchNow’s market share of Canadian dark trading is nearly 65 per cent, and it accounts for approximately seven per cent of total Canadian equities volume, according to a statement issued by the U.S. acquirer.

So-called dark pools allow investors to trade without the transactions being visible until they are completed. They are popular with large institutional traders, whose trading intentions, if signalled, can move markets. Dark pools have grown in North America alongside high frequency electronic trading.

CBOE said the MatchNow acquisition will expand its geographic footprint and provide potential to diversify its line of products and service. It hopes to build “a comprehensive equities platform for the Canadian markets and potentially establish a significant presence in the region.”

The transaction, which is subject to regulatory approval, is expected to close in the third quarter of 2020.

A handful of alternative trading systems were launched in Canada around 2008, providing competition to the still-dominant Toronto Stock Exchange and its related venture and derivatives exchanges in Vancouver and Montreal.

But subsequent regulatory changes and international mergers and acquisitions have altered the landscape in recent years.