CBOE’s acquisition of Canadian dark pool a positive, Moody’s says

The CBOE’s expansion into the Canadian equities trading business with the planned acquisition of alternative trading system MatchNow is a positive for the company, says Moody’s Investors Service.

In a new report, the rating agency reviewed the deal for Cboe Global Markets, Inc. to buy dark pool MatchNow, a deal that will broaden Cboe’s presence in Canada and build up its equities trading business.

While the deal is only expected to add about $10 million in annual revenue, “the acquisition would expand Cboe’s geographic footprint and trading offerings,” Moodys said.

Amid the increase in market volatility prompted by the Covid-19 outbreak, trading volume has surged to record levels in both Canada and the U.S., Moody’s noted.

In the U.S., dark pool trading has grown faster than exchange trading during the crisis, Moody’s said. In Canada, dark pools accounted for about 9% of trading volume in the first quarter, compared with 12.5% in the U.S., the rating agency reported.

However, Moody’s said that MatchNow has continued to grow its market share amid the decline in dark volume generally.

“Despite a downward trend in overall dark pool trading volumes in Canada, MatchNow has been able to grow and maintain its market share,” the report said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.