RBC Capital Markets announced today that it has agreed to acquire the broker-dealer business and certain other assets of the Carlin Financial Group, a New York-based boutique broker dealer known for its sophisticated trading and execution services and proprietary algorithms.

The deal is subject to regulatory approvals and other customary conditions and is expected to close in the first quarter of 2007. Pricing terms of the transaction were not disclosed.

RBC Capital Markets said this acquisition will give it “a best-in-class electronic execution platform from which to serve the emerging hedge fund and professional trader communities.”

It will also it continue developing a best-in-class North American electronic execution platform for its investing clients. RBC Capital Markets has been building its capabilities and client base in the U.S. mid-market for the past five years.

Carlin Financial has one of the fastest and most efficient electronic trade execution platforms in the industry, and trades approximately 35 million shares daily. Under the leadership of CEO Jeremy Frommer, the Carlin Financial has built a large following with emerging hedge fund managers, a professional group that executes a growing portion of all hedge fund trades and manages a significant percentage of all hedge funds in the U.S.

“This transaction will help us to meet our clients’ ever evolving needs by expanding our capabilities into options trading, future trading and order management,” Frommer said. “I’m very pleased to return to RBC Capital Markets, where I spent the earlier part of my career, and we look forward to helping clients excel in this rapidly changing environment.” Frommer brings nearly 17 years of trading and financial management experience to RBC.

“We believe that this acquisition allows us to create a leading North American electronic execution platform for investors and expand into multi-asset class electronic trading,” said Greg Mills, RBC Capital Markets’ head of global equity sales and trading. “Emerging hedge fund managers, professional traders and other clients of the CFG Business will continue to receive the same high quality of service they’ve come to rely on, and will now also have access to the full range of capital markets products and services we offer in the U.S.”

RBC Capital Markets represented itself in the transaction and Carlin Financial Group was advised by Freeman & Co. LLC.