NYSE Euronext is joining with alternative trading system, BIDS Holdings, LP, to form a joint-venture designed to improve execution quality and access to liquidity in block trading.

Once formed, the joint-venture will be open to all New York Stock Exchange members and accessible through BIDS Trading, a registered ATS, which will become a NYSE member. The joint-venture will operate as a facility of the NYSE and be subject to regulatory oversight by NYSE Regulation.

NYSE Euronext and BIDS Holdings will each have a 50% ownership stake in the joint-venture, whose formation is subject to approval by the U.S. Securities and Exchange Commission and certain corporate authorizations. In addition, NYSE Euronext will make an undisclosed investment in BIDS Holdings, becoming the newest investor in the company, and joining the current owners: Bank of America, Bear Stearns, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan, Knight Capital Group, Lehman Brothers, Merrill Lynch, Morgan Stanley and UBS.

“The joint-venture is a timely response to customer needs and reflects our commitment to diversification and customer choice,” said Duncan Niederauer, president and co-chief operating officer of NYSE Euronext. “We look forward to working with BIDS Holdings and our key sell-side constituents, which represent half of NYSE-listed volume traded on the exchange, to re-aggregate block liquidity. We believe that this innovative co-branded approach with BIDS Holdings will serve our clients and markets well by bringing block-size orders back into contact with active traders, algorithms, and retail flow.”

“We welcome this partnership with NYSE Euronext and expect that the joint venture will address the current inefficiencies in block trading such as market fragmentation,” said Tim Mahoney, CEO of BIDS Trading. “Moreover, this initiative is an endorsement of our efforts to build the leading block interest discovery and trading system in the U.S. Volume on BIDS Trading has been growing significantly, reaching more than one billion shares* in less than six months of trading.”