Briefing

BMO acquiring trading software firm Clearpool as Big Six tech race heats up

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BMO’s purchase of the New York-based firm, whose software supports about two per cent of daily U.S. stock trading, is subject to regulatory approval and expected to close in the second quarter. (The Logic)

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Talking point: BMO didn’t disclose the purchase price, but The Globe and Mail reported the bank was planning to pay about $100 million. That’s the same price TD Bank paid in 2018 for Layer 6, a Toronto-based AI firm. Each of Canada’s large banks is now spending over $3 billion annually on tech. The Clearpool acquisition is BMO’s second recent one, deepening its exposure to U.S equity markets. In September 2018, BMO acquired New York-based KGS-Alpha Capital Markets. Clearpool has over 100 institutional clients, mostly U.S. broker dealers that offer some similar services to BMO. However, BMO will put in place “information barriers” to establish a firewall between Clearpool and itself.