KCG Holdings Inc. (KCG)

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KCG Holdings Inc.
KCG Logo.png
Headquarters Jersey City, New Jersey
Key People Daniel Coleman, CEO
Products Trade execution

KCG Holdings Inc. (KCG) is the name given to the former Knight Capital Group after it was acquired by GETCO in the summer of 2013 for $1.4 billion. KCG is the merged entity.[1] The company offers trade execution to broker-dealers and institutional investors across all capital markets. It also owns a majority stake in hedge fund manager Deephaven Holdings.[2]

Jefferies Group LLC owns a 20 percent stake in KCG, after it boosted its original stake by purchasing an additional 6 million shares in March 2014. Jefferies was one of several firms that helped rescue the former Knight Capital Group in 2012 after a technology problem caused it to lose $440 million in one day of trading. Jefferies acquired the shares for $11 each, bringing its total holding to 22.5 million shares.

History

Also See Knight Capital Group

To create KCG Americas LLC, the brokerage operations of GETCO Execution Services LLC and GETCO Securities, LLC were first consolidated into Knight Capital Americas LLC (KCA), then OCTEG, LLC (OCTEG) was merged into KCA, which was subsequently renamed KCG Americas LLC, effective December 31, 2013.[3]

On October 15, 2014, ISE announced that KCG had enhanced its execution capabilities for the stock component of multi-legged options strategy orders. The enhanced execution capabilities access liquidity directly from the equities exchanges, whereas previously, orders were sent only to alternative execution destinations, such as dark pools. Fill rates for multi-legged options orders that include stock increased as a result of this enhancement, the exchange said.[4]

On December 1, 2014, KCG Holdings sold its futures commission merchant, KCG Futures, to Wedbush Securities Inc. [5]

In July of 2016, KCG announced it would acquire Neonet Securities AB, an independent agency broker based in Stockholm, Sweden from its shareholders, Hay Tor Capital, KAS BANK and Cidron Delfi Intressenter Holding. The financial terms were not disclosed.[6]

Products and Services

In September of 2014, KCG also announced a new trading venue called HotSpot QT for currencies. The platform does not disclose prices to the market before or after transactions are placed.[7]

KCG and Trading Technologies International announced in February 2015 that TT would introduce connectivity to KCG Fixed Income in the first quarter of 2015. KCG provides direct access to on-the-run U.S. Treasury liquidity. This is the first time TT has offered connectivity to liquidity from a non-exchange provider.[8]

KCG began linking its fixed-income trading venue BondPoint to Charles River's Investment Management Solution in February 2015. The arrangement is intended to provide KCG with more institutional order flow from clients using the Charles River IMS. BondPoint, a registered ATS, links more than 400 financial services firms to approximately 200,000 live bids and offers each day.[9]

KCG announced in February 2015 that it would unite its network of microwave towers with World Class Wireless LLC to create a joint venture called New Line Networks LLC. The venture will pool the companies’ microwave infrastructure to try to create a dominant global network. WCW, which is owned by ECW Wireless, has the same address and senior managers as the high-frequency trader Jump Trading.[10]

Key People

References

  1. KCG History. KCG.
  2. Getco goes away. Crain's Chicago.
  3. Knight Capital Americas Gets Renamed KCG Americas, Unlocks Cost Synergies. Forex Magnates.
  4. ISE and KCG Jointly Enhance Execution Capability for Multi-Legged Options Strategy Orders with Stock Component. ISE.
  5. KCG Completes Sale of Futures Commission Merchant. Press Release.
  6. KCG To Acquire Neonet. KCG.
  7. KCG Sinks as Executives Depart Speed Trader Turned Broker. Bloomberg.
  8. Trading Technologies to Establish Connection to KCG’s Fixed Income Liquidity. Trading Technologies.
  9. KCG Integrates Charles River IMS to Grow Its institutional Business. Traders Magazine.
  10. Speed Traders Team Up in Microwave-Tower Superhighway Plan. Bloomberg.