Goldman to sell designated market-maker unit to IMC

Thu May 22, 2014 6:43am EDT

A trader works at the Goldman Sachs stall on the floor of the New York Stock Exchange, April 16, 2012. REUTERS/Brendan McDermid

A trader works at the Goldman Sachs stall on the floor of the New York Stock Exchange, April 16, 2012.

Credit: Reuters/Brendan McDermid

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(Reuters) - Goldman Sachs Group Inc (GS.N) will sell its rights to operate as a designated market maker in more than 600 New York Stock Exchange-listed stocks to Dutch high-speed trading firm IMC Financial Markets, IMC and NYSE said.

Designated market-makers, formerly known as "specialists", operate both manually and electronically to facilitate price discovery during market openings, closings and during periods of substantial trading imbalances or instability for thousands of NYSE-listed stocks.

IMC is one of the largest market-making firms in the world and operates on more than 100 exchanges around the globe. It provides liquidity to NYSE Arca, Nasdaq, BATS and CBOE among others.

Financial terms of the transaction were not disclosed, though the Wall Street Journal, citing people familiar with the deal, reported that IMC paid under $30 million. IMC also plans to hire about 15 floor brokers from Goldman Sachs. link.reuters.com/xem59v

The Goldman Sachs DMM business team is expected to join IMC as part of the transaction, IMC and NYSE said in a statement.

The deal is expected to close in the third quarter.

Goldman acquired the designated market-maker unit as part of its $6.5 billion purchase in 2000 of Spear, Leeds & Kellogg.

Goldman will remain a broker on the New York Stock Exchange's trading floor executing trades on behalf of clients.

(Reporting by Mridhula Raghavan and Avik Das in Bangalore Editing by Eric Walsh and Maju Samuel)

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