Bank of New York plans to offer direct-access trading later this year, after agreeing to buy Francis P. Maglio, a direct-access brokerage specializing in listed shares. Terms were not disclosed. The acquisition is being made by BNYs brokerage subsidiary, BNY ESI. Carey S. Pack, president of BNY ESI, said growing use of direct access by institutional money managers prompted BNY to diversify its trading options.
Direct-access trading software electronically consolidates multiple exchanges and allows traders to automatically route trade orders to multiple execution destinations without using a broker. The number of direct-access providers has increased dramatically to nearly 40 today, from 12 a year ago.