Friday, March 31, 2006

Consolidation Continues

While writing this year’s broker story, I asked quite a few people what they thought about the ongoing consolidation in the industry.  I also asked the various interviewees to tell me, off the record, which brokers were obvious takeover candidates.  Several mentioned that they thought Terra Nova Trading would be on the block, and as it turns out, they were right.

This morning, Rush Financial Technologies, Inc., dba RushTrade Group (OTC.BB: RSHF) announced that it has agreed to acquire 100% of the outstanding membership interests of Terra Nova Trading, LLC (“Terra Nova?), Market Wise Securities, LLC and Market Wise Stock Trading School, LLC.  Both firms have been operating in the frequent trader space, marketing themselves to day traders and hedge funds. 

According to a press release, the combined companies will have approximately 20,000 customer accounts and over $500 million in customer account assets. Mr. D. M. “Rusty? Moore, Jr., Chairman and Chief Executive Officer of Rush said, “We are very excited about the combination of Terra Nova’s ‘back-end’ technology with RushTrade’s proprietary ‘front-end’ platform.”

Terra Nova has long offered Townsend Analytics’ RealTick trading platform to its clients.  Terra Nova has been self-clearing for two years, while RushTrade has cleared through Penson.  Penson’s back end technology is quite rigid, from what I’ve seen, and a move to self-clearing would be in the interest of Rush’s customer base. 

The release indicates that the RealTick platform will continue to be offered, and includes a comment from Stuart and MarrGwen Townsend, the founders of Townsend Analytics, Ltd.  “We will continue to work together with Rush and Terra Nova to provide their customers with the best possible trading solutions,? they say. 

Posted by twcarey on 03/31 at 02:43 PM
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