June 20, 2011

Lightspeed Financial, a New York-based brokerage, has acquired Lime Brokerage International (Ireland) Limited, a wholly owned subsidiary of Lime Brokerage Holdings LLC. The move represents Lightspeed's first move overseas and follows Wedbush's June 13 acquisition of the main assets of Lime Brokerage LLC, the US-based broker dealer that provides high-speed trading technologies and strategies. Terms of the deal were not disclosed.

The acquisition will give Lightspeed ownership of Lime's Ireland broker dealer license as it seeks to provide individuals throughout the European Union access the US equities markets. European investors will be able to access US markets through Lightspeed's trading solutions.

The acquisition is essentially of Lime Brokerage International's license, since the company does not have an established business or client base, says Steven Ehrlich, chief executive officer, Lightspeed Financial. "The size of the Lime Brokerage [International] business is essentially zero," said Ehrlich in an interview with Wall Street & Technology. "This is beneficial for Lightspeed and it is the perfect opportunity. We can start with a clean slate and start from scratch. This will allow us to establish a well thought out set of processes, procedures and technology architecture in our European business." The entity will be called Lightspeed Financial Ireland Ltd.

Ehrlich says this acquisition reflects some of moves in the exchange space, where consolidation has been a trend for the past year or more. "The markets are becoming more global and traders want to trade globally," Ehrlich said in the interview. "They want to trade across markets. Our specialty is focusing our product and our gateway to service the way active traders want to trade in the markets. Now, Lightspeed is taking its suite of products to the global marketplace." Lightspeed is a provider of low latency direct market access trading technology, risk management solutions and brokerage services for retail active traders and institutional investors.

Lightspeed will bring its own technology architecture and Lightspeed's trading platform, Lightspeed Trader, along with its automated trading solution, Lightspeed Gateway, to Lightspeed Financial Ireland. "Ireland has a deep and talented resource pool and we are looking forward to establishing our trading technology for traders and investors in Europe," Ehrlich said.

Lightspeed's direct market access (DMA) technology will allow European clients to access the US markets, Ehrlich said. "There is a tremendous opportunity to take our DMA technology to a global stage," he said. Global expansion "has been part of our plan since Lightspeed started five years ago. Even with the lower trading volumes in the US, it is still the most liquid market in the world." Accordingly, Ehrlich says Lightspeed receives approximately 1,000 requests a month from potential clients in Europe who are looking to access the US markets.

Later in 2012, Lightspeed plans to give US-based customers access to European markets through Lightspeed Financial Ireland. "The next phase is to offer European execution and clearing to our US customers," Ehrlich said. "We tend to phase things in at Lightspeed. We prefer to walk before we run."

"We see tremendous long-term growth opportunities for investors in Europe who want direct and immediate access to the liquid, vibrant US equities markets," said Ehrlich in a press release. "Since our inception, we have remained squarely focused on taking incremental, measured steps to grow our business in a way that that makes the most strategic sense to ensure the long-term success of our company. We believe there is a strong appetite from individuals in Europe who want to take control of their financial futures and diversify their investment portfolios by trading US equities."

Ehrlich continued, "We view this deal as the first step in an effort to begin broadening awareness of Lightspeed internationally and to eventually make our suite of trading solutions available to individuals throughout the entire European Union. Our proven technology will give them the speed, stability and reliability they need to trade the U.S equities markets even during the most challenging, volatile conditions. We are certain this strategic acquisition will prove to be an important growth driver for Lightspeed in the months and years ahead."

The acquisition of Lime Brokerage International (Ireland) Limited is Lightspeed's sixth transaction since its inception in July 2006 and follows the recent acquisitions of Terra Nova Financial and the perpetual license to operate the Anvil trading platform in June 2010.

ABOUT THE AUTHOR
Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology.