June 18, 2015 / 6:45 AM / 4 years ago

UPDATE 2-High-frequency trading firm Flow Traders plans IPO

* Dutch trading firm Flow Traders to list in Amsterdam

* Owners plan to sell 40 percent stake (Updates with CEO comments on conference call)

AMSTERDAM, June 18 (Reuters) - The owners of Flow Traders, a Dutch high-frequency trading firm, plan to sell around 40 percent of the business through a listing of its shares on the Euronext stock exchange in Amsterdam, the company said on Thursday.

CEO Dennis Dijkstra would not comment on reports in Dutch media that the company would seek a valuation of around 1 billion euros ($1.1 billion). Shares will be sold by current investors including private equity firm Summit Partners.

Dijkstra said he hoped the listing would raise the company’s profile and give it better access to capital markets but did not specify when it would take place.

Flow Traders has offices in New York, Amsterdam and Singapore and reported net profit of 67.9 million euros ($77.1 million) in 2014 on net trading income of 172.7 million euros.

It offers liquidity for exchange traded funds, or ETFs, via trading desks in Europe, the United States and Asia that cover major markets around the clock.

“While we do not have any clients, we enable investors to buy and sell ETPs (exchange traded products) efficiently by quoting bid and ask prices,” the company said in a description of its business.

“We seek to earn small amounts of money on large numbers of individual transactions based on the differences between our ETP prices and the prices of the underlying” securities.

Dijkstra said competitive advantages include the company’s 10 years of experience in a relatively young industry, its risk controls, and its size, working across 94 exchanges in 32 countries.

Founded in 2004, Flow Traders said it was making strong progress, including 38 percent annual growth in net trading income from 2012-2014, a trend that was continuing into 2015.

High-frequency traders were the subject of Michael Lewis’ 2014 best-seller “Flash Boys,” which argued that the traders have an unfair advantage because exchanges let them obtain and trade on market-moving data faster than ordinary investors.

A federal judge in April dismissed lawsuits accusing several major U.S. exchanges of cheating ordinary investors by selling early access to market data to high-frequency traders, giving them a split-second advantage in making trades.

Morgan Stanley and UBS are global coordinators of the offering, with ABN Amro and Credit Suisse acting as bookrunners.

Rothschild is advising Flow Traders. ($1 = 0.8813 euros) (Reporting by Toby Sterling; Editing by Mark Potter and Keith Weir)

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