Bank of America Corp. (BofA) is tearing down an electronic market-making unit created last year to serve the lender’s Merrill Lynch wealth-management division, Bloomberg News reported Thursday, citing people with knowledge of the matter.
Increased regulatory scrutiny of US equity markets and internal concerns over potential perception of a conflict were said to be the reasons for dismantling the unit. The desk advanced to a testing phase before being abandoned in recent weeks, the report said.
“This is either not a profitable business anymore or they don’t want to deal with the regulatory scrutiny that’s coming,” Joe Saluzzi, co-head of equity trading at Themis Trading LLC in Chatham, New Jersey, was quoted as saying.
The US equities market has been under renewed examination since the March 31 publication of “Flash Boys”, the Michael Lewis book that argues the stock market is rigged, Bloomberg said.
The US Securities and Exchange Commission is reviewing its rules and New York Attorney General Eric Schneiderman has opened an investigation into whether certain services at exchanges and other venues give high-frequency traders an unfair advantage, the report noted.
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