VIRT - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Kelly, and I will be your conference operator today. At this time, I would like to welcome everyone to Virtu Q3 2018 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator like Investor the Relations. now Andrew over Smith at to would call turn to I Please ahead. go

Andrew Smith

Thank you, Kelly. for calling. Good morning, everyone, and thank you

morning As were our second our and this website. you on are quarter available know, released results

We these you Securities XX-K to factors statements on Annual notes in encourage regarding and the call Report and which events, press remarks Cifu, cautionary Chief including subject Douglas your contained and any Molluso, description Chief forward-looking undertake to then you new Executive with are may will Exchange future releases represent They actual announced the update to company, of transaction, any and other on made risk Virtu's which and filings and our indicated review Today's forward-looking our statements. in therefore regarding Joseph our current and financial outside Financial Mr. refer Form differ take our the and answering Officer. statements are what to based your note is do presently call important control, in information may are we becomes not Commission. available. and forward-looking to uncertainties, this condition begin on Speaking belief statements, revise today from results the and and our assumptions Mr. risks, include as materially question the may that forward-looking or information Officer; It with forward-looking is statements be questions. available company's prepared to

the materials. these terms will may and non-GAAP find of refer reconciliation to to earnings we in certain you In GAAP addition measures included to measures GAAP a results, non-GAAP

Virtu's Officer. like to Douglas would Chief call over I to the Now, Executive turn Cifu,

Douglas Cifu

everybody for Thank you, us joining and thank today. Andrew, you,

very announcement a solutions and our our technology, to step definitive for our important natural significant addition in our make. expanding a client ITG. evening, and we global we business a our is acquire clients. institutional underscores liquidity commitment third quarter to to agreement signed Last transparent strategic to This have In earnings, acquisition next analytics,

core its company deck, capabilities offer to beyond and in products the of of was improve operations, combination making be XXXX equities of ITG's trading own including long-standing in analytics, technology cannot a enhance benefits combined execution leader currently. teams market I'll detailed opportunity innovator of and businesses operation technological to the and with Canada, review of ITG's that aspects Virtu's powerful its of provide a to franchises value our X X and client overall stand and ITG solutions global will execution an to talented and each to markets what a and ITG's of products has All of services the franchises market. experienced our truly Virtu's agency offering of areas solutions on its leadership efficiency, liquidity in and create of global the workflow for can will responsibilities. experience slide employees global on services, offerings will Asia. world customers key business. experiences enhance that States, presence ITG technologies, Today, ITG's Europe from the and and And is global with algorithms, improvements middle- program the global and The complementary in a Each United overstated. clients globally, back-office make in and that to infrastructure, capabilities technology clients' scaled and market-leading from its and routing pioneer single and Virtu clients including research well Our their an been offering a in built sourcing, rely trading, businesses. a which efforts pages every benefit the which significant technology and continuous global as strong compromised services globally. manage in as for upside be nature suite trading cutting-edge to the complete will our overview stock shareholders. has efficiency. operates to day-to-day fiduciary utilize services, franchises the from trading start development as premier common management benefits ITG Since suite on trading performance benefit the and we the are allows with respective leading of customer-oriented with core and Clients order technology day. clients Virtu's risk algo clients

for about fixed are attractive payers, income XX liquidity equities, products. to and block, in commodities global products sales ITG's sell over force global FX and different We the opportunity excited Virtu's customize ETFs

be institutional offer. liquidity to uniquely from customized activities. principle our effectively books, is firm from positions, which provide market risk comprised will clients We are retail, and other making something that positioned with no can resulting institutional from This

X. Slide to Turning

their in You for that doubt protecting aspects These ITG and of has and our making information. market businesses information, procedures and assured design client take established have information continue and client information designed this we entitlement our place be Virtu most seriously in and concerns, natural existing have. and on safeguard logical We control Rest will sensitive all see reviews. separation, access protecting analytic sensitive we'll customers' business. we policies we no in the in to entrusted will include importance client that the obligation Clients that physical in segment. vigilant clients recognize the mind. and are to to our appreciate confidential safeguards with policies POSIT, our in Trident, procedures

forward the safeguard continuous ensure training. and separation, there ITG build be physical logical going will monitoring, testing employed has and that existing to and We on

Alert end by analytics keycard controls adherence. access the restrict will in POSIT will located trained to Personnel logical and will restricted spaces, be technology physical Let's only for and example. discuss businesses, will monitor, authorized personnel be to ensure access. be They separate

and firm to effectiveness testing and and the are looking review safeguard policies our external through to we auditing monitoring audits, of our to addition independent internal regularly control. In contract also

In is customer. technology to using addition the firm Virtu end safeguards, to believe to the transparency in enhance

unprecedented ability importantly institutions for that visibility the their to their routed. had lifecycle of the provide That they complete just why not tools were Our routed, orders includes were orders. into

More and directly to look and their legacy Europe to and me. current future. the global prepared to little Asia firmly that the through is how combined The feedback sophisticated indeed ITG in dozens franchises ITG with offering are know some day-to-day of most a forward money the managers anticipate algorithms of an leadership no we getting servicing from The who the received each for importantly, standpoint closely Robert have I around be from we perspective, of merger. change most based Remember Etienne, of on understand of Virtu, that non-U.S. type and firm. to We feedback world, clients legacy experienced, of the personnel. Canada, we combined will Virtu a solutions them side in global there talented existing better combination teams Virtu's users institutions. buy the will liquidity with global report are sourcing. a and agency this and are believe be interact demanding from the we CEOs be on and sophisticated specific institutional began legacy offer professionals, based client working the From firm to retained should and Michael in will of

excited we personnel together for that addition, in with has U.S. In experiences. and key U.S. the the client team are in to coverage our enhance the account talented work ITG to

review first acquisition itself. the through some strategic From Joe I'll to stabilizes of turning revenue go of to of it transactions a benefits the overall terms specifics view, Virtu's the and Turning the base. of point turn some of diversifies X, the Slide and then over to to transaction. the

Virtu's trading should This improving underlying this commissions access increase net acquisition, liquidity. fees best from to XX% business unique forma XX% noted currently be is and result experiencing Execution client basis. Virtu's Services and our a closed income a approximately acquisition. direct KCG Following of that will Virtu's is It performance since technology integrating adjusted its on pro we the to from

quarter, from decreasing consistent in see has excellent. Execution revenue effect quarter our ITG's base performance significant basis Also Virtu's has the on market them can volatility. an early quarter and will you of here volumes in and than Services volatility. October still clients more is While uptick historical And been in to feedback the overall our the Virtu outperformed importantly, have

with recurring transaction KCG, quarter Finally, we addition to quarter bring as this the of a Virtu's ITG's and products revenues analytics will dampening believe to further meaningfully standpoint, value shareholders. volatility. accretive be will From workflow Virtu, to

now integrate our $XXX which X-year We overall with track these expect record period. we We our demonstrates believe synergies, achieve a to net ability to successfully. modeled companies of KCG have over million

and fund debt. over capital of portion at million will be the rest $XXX We used will which to have identified transaction used pay closing to a a of synergies, be the time

equity transaction. issue new no We to this a will enter term agreement. will loan into Instead, finance we

Virtu the this believe be value Finally, transaction the accretive of will power given the we for creation of through issuance, synergies lack potential shareholders. equity the and highly combination, to

to discuss synergies. expense review turn and significant detail Joe? Now, me let capital around key Joe, the call to over select and terms

Joseph Molluso

a I Thank presentation few have this slides distributed that go in we Doug. through of will you, the the morning.

the X, And agreement for a cash secured. share. deal. It's to ITG on an definitive Slide per $XX.XX Moving acquire to we have all signed we financing

to billion and for existing term pay acquisition. our refinance approximately $X the incremental raise will We loan an

public Doug integration, approximately savings the of that the think would XX% we rationalization, focus recurring detail KCG be a companies I X will As on And businesses, basis. of achievable. ultimately first in mentioned, traditional the a leadership This very we Virtu we'll this occur XX% run when rate infrastructure the achieve provides closing is that will ITG's ITG's acquisition, and expect cost supplemented with is XXXX. technology Slide base. trailing current as in based and from XX-month well leaders net of the synergies. on expense key as back-office We estimated merge. note on synergies on some again half

synergy this and revenue visible Again, achievable. most Slide on has using here. transaction But the the the that was un-modeled available On percentage opportunities ability talking public after XX other the months the which related hypothetical reductions in the transaction accretion over of - to interest capital synergies lower from for is incremental $XXX exchange discussing. exchange and So this our based figures upside Slide we're XX from giving anticipating not the expense costs financing, of to around after-tax the And expense and can value is information. XX, Slide very this from XX, is execution first adding see reviews guidance a savings are shareholders. we're Doug the closing. achieving fees. million we some clearing subtracting you obviously, we XX the create think public

KCG from expect contributing capital the our and reduction Asia, trading cushion, a sufficient and overall we in to to transaction, Americas, As retain and a with substantial outstanding in release regulatory capital while Europe operate indebtedness. the business to operating

that to reduced it to to at X on at XX, in or leverage closing to I and expect of as indebtedness inception. X.X outstanding would the we mentioned, KCG times expect capital trajectory are Turning expect X.X synergies pro we QX, transaction we as be again, realized. the X.X And, be think And number Page expense to given forma be lower. would as to Doug this

the on in quarter to all will turn to given third back So touch call briefly go I the Doug Q&A. to we now before highlights some that,

Douglas Cifu

much, very you Joe. Thank Great.

Page on our on You'll see in information quarter, third we the have starting materials we XX. posted,

Some per from share trading adjusted following. key and adjusted the third takeaways are $X.XX net million our earnings income. of $XXX of reported We quarter

share volumes was limited versus QX. down As Realized QX, was makers from were you were the Slide U.S. down environment can XX%. XX, and QX. retail consolidated in disclosure equity XX% interactive participation measured as down brokers by volatility versus respectively X% And VIX and see as operating market on XX% volume

as highlight you of these seen also the our around would results business have VES single markedly improved stated in metrics and and our like is have October. QX. see, can has technology material I ahead VES As that October a have to And improvement. versus turned I dramatically market the volatility as by performance volumes sizeable to unified uptick implied we earlier migrated in Also platform

target versus on operating our are expenses guidance. Finally,

buyback To We KCG from program. of way our shares are Virtu rate previously the repurchased share synergies approved of transaction. million expense have our of announced $XXX we terms and the in run to XX% the $XX.X of date, base million

the approved In a addition of the turn since And question-and-answers. third KCG on our has finally, to the we as $XXX over will Joe bringing share our to of noted, acquisition. board that, dividend I quarter. quarter, a term payments our million during the incremental closing for total loan, With of call $XXX the made third prepayments million $X.XX

Operator

the Your Kramm Alex question comes Please first from ahead. Instructions] from [Operator go of line UBS.

Your line is open.

Alex Kramm

hey. Good Yeah, everyone. morning,

Douglas Cifu

Hi, good morning.

Alex Kramm

the bit since talking first - my of even of have in be and my better may line. of the I appearance a there may ITG I if all, sort if you other media, is first But question guess, be first don't actually any I've even think think technical, is I folks there that was And guys know then, I where the argued on in seen be of that there would may think I companies be more Frank interested a and don't some the little fit. here. fees, breakup it curious, is

others call, or have the of fees breakup that of sort again, So, you. background sort terms but helpful. any he any Thank not on in will up may of shown is sure be

Douglas Cifu

is years Yeah, It's Doug just XX lawyer. M&A being the spent on and not an call. I Frank

one. to easy for So I'm happy handle an That's one that me.

I standard are merger protections so significant market prior comment expense. there is $X I a there. breakup and Virtu. because a will it reimbursement $XX rumors, breakup the will So approximately with on share deal X.XX%, the comment of fee do had you pretty nothing not plus in of did a not fees million, It's agreement. of of There amount if to the around

Wachtell, the if news, a of J.P. period time. best, out Lipton. Alex, the ITG represented there was Morgan certainly the and will, by So of for been has you best

they fully brand, name And sure, that, a name what is and about the of their about a organization, in we are are pioneer it's transaction, a not. I'm and very duties have unconcerned so, And markets. exercised excited been household the fiduciary world-class a we electronification ITG

for as the think And to conditions. we and to what are And the acquisition and Hart-Scott-Rodino hope a Improvements some so we various as the integration obviously important made Act have possible and as period. Joe subject said looking in closing XXXX happened strategic then, other which we I firm, very closing, approvals forward the under clearance also early regulatory Antitrust

Alex Kramm

you since assets then Fair slides the transaction, think. for excited pretty did like the comparable of ITG right. different enough. When pretty there. about KCG there another then has I you assets some out you're I but one I mean, at you that call BondPoint, they think been here, your All the, multiple products owns, analytics for that secondly all example. there I of And have I like been some are look seems obviously it's those space quick If set it guess, assets. what - big market some

monetize the think wondering, you So this need if other really, opportunities to is things? some any business? I is hold maybe to future Or if whole there you just

Douglas Cifu

this were suite they but ago, because think, we I Look, of institutional really to our that actually because, you frankly, years I seem got I obviously, to world, experience of business, - say, a great world market proud item hey, I world-class clients it are adds product, proposition, long about to time, value it, selling. blah, seems with are three I it like, blah, really the how what analytics first blah. and products was it known all couple but have introduced Because and of products I with a TCA knew, for is be products, about we couple three me enamored its it's any important product, I've first-hand very kept what didn't and a analytics Frank started I the him, everybody ACE. up have Virtu him and ITG and And this years respect talking ago. a legacy of We the everybody, when of called works for called maker, mean, and agency tell

So way institutional were want the represented explained to most it as how an make and does all attractive to in this analytics. cetera, we et we et to to how in obviously we and their scored work, cetera. respect understand broker, And me that sure we with wanted

about we've a lot So learned it.

enjoy and core that that you the as and Virtu firm talking a is I Frank some making analytics a clients and attractive the market standard core. for it we really The about It's time spent thing products. So have really if products, view thing will gold global us, really it. is, excites its

on market have We We different to analysis own making do We market countries. know that every with do the XXX access order marketplace. markets to XX We in our markets-and-markets we different respect place into structure. our TCA capabilities.

not separate offer We'd equities, in in can't but to products, So is income happy as only that in we off FX in appropriately. walled commodities business, service products, reason, fixed a wholly global also be there no products.

product unique be electronically that analytics spoke, And and is You can an that to to is and name that Virtu's real trade today have a time, product we there. its Virtu. then

that prepared expand a to firm, that. it's and that's incremental position are not do asset to Alex, We classes better offering, to

want that it So I buy again to out XXX to now side, we right because - world. leave desktops also about Trident on very are don't product, excited around the all product, the it's the is

So for other and to push world. important part products I way a our brokers algos and to it's and think, the our very us

going it's transparent. to be all distribution, about So fully we're

there going products are do to experience just we we to and see, we're client better, better. because everything the can make ITG an proposition that to want the really part of that think, I I those make important think, value

Operator

of Christopher go from Your Allen Point. Compass Please next question the from comes line ahead.

Your line is open.

Christopher Allen

trouble bit dis-synergies? different What's reconcile just core do deal. market of ask, potential kind project agency with The obviously, with from business. to been of there. you where again customer ITG's obviously out onetime, the customer broker, damage and in how it brand the independent argue an omega And is maker were just was - little Congrats on customers, hooking Market gotten I its the level kind of ITG issue, morning, wanted overlap? Making guys. to brand has there has Good digging Virtu's this a the

dis-synergies forward? level percent think the trying dis-synergies? are there think how to And talked just about decent going be I for revenue you moving about revenues assumption the is out guess but to at potential revenue the guys So synergies, of of thinking market I I about

Douglas Cifu

brand question. more great it's absolutely, the ITG of of a an XXXX. as the we're or have aware and respect foothold great Yeah, in we're it, that they had independent for obviously Obviously, cognizant very we

the think was that prop is hadn't any XXXX clients. really what the we just that it were counterparty direct been all in is Virtu, I and and candidly That's and with issue being they their with upfront customer, a and our counterparty, not in deal engaged starts - upfront me, trading ultimately about transparency very with. with with any issue and

are we so And to know know and significant prop will is be. universe obviously, that very firm retail and a and always we the Market clients Making will going

prop We the phenomenon. well Knight Virtu has business not years. we This when have new got bank been for in and not. with. is deal basis, It's are the well. a business of a Market this XX got aware since very customers as phenomenon this conflict acquired new you that they business we sell that in side, over every legacy Making, what they've They've also XXXX And in been had institutional for XXXX, - on not a

offering better for that are make there that a of to actually reasons. makes much in And couple mechanisms so this would I the happen. place argue

use Market and First has cutting same the core that and and make we and to updated, which market acute edge, doesn't spear, the weekly, our markets at basic to is, DNA, Market business, structure if for business. which it's and of access be understanding hourly, technology we has Making the Because that scale of Making daily, same money. be not tip the for the to use indeed it

to are orders same that to understanding using market customers. route use We going structure, our that of have same for and we same that how been infrastructure,

use in market, the you Virtu, scenario, the everyone winning technology. get the those a complains first thing. customers financial does latency that have that So you low about, have That's is all because tools. that Everything now firm

is, in retail only customer that United we'll in unique I'm The I base, said second States has as remarks, the we will our unique that this And make we're thing, combination which liquidity certainly has candidly and in of and my the the that have prop world available that expand aware liquidity. continue been here. to firm to of,

overall, a this Chris. is a ITG a Sure, transparency. And overlap? it's so being But that separately. happy it's through really not there Is not But significant would is It's customers, try think. overlap. to that all go same upfront one there to as about does. there We're is. about win-win, we the Obviously, all customer the cover with significant

to zero had on synergies, well, institutional X% we've of modeled happened around something what the and we the of transaction, the So $XX attrition million similar we is which business. assumed Knight X% experienced as In side. institutional

So my customers our I best that concerned. will and there customers transparent, talk and will will to as out be entire I to do team. to am aware institutional be be

value I the of firm ultimately it's set a like and a customers like skill will having firm with married ITG. see think great Virtu, proposition

Christopher Allen

Got it.

equities one an equities, of in the class to equity really, and we shop. mean, Just to time? ITG at end but sort away the perspective diversify I diversify that day, about you and bigger how over FX other get fixed of asset from class into it's even recent Obviously, from asset income follow-up. looking periods, thought been has such and quick any

Douglas Cifu

fourth Yeah, great. see I you'll in the a equities further seen hopefully we've growth mean, in a think, of quarter. our manifestation it's organic of I lot business, that

asset class is we this So enjoy in. leader that knowledgeable or where an market

we - the if really talk in Asia, first Europe, will ITG has throughout in in diversification, Canada, the will And most about ITG franchise But franchise. think that is - pan-Asia. rate that's transaction. and a really the important I U.S. the you I from think get and this

is, The we since first this business, started ITG transaction customer we Virtu day in unique been institutional and nothing thing have a we've basically. We in the European Asia. have nothing an smaller about Canada,

products. We analytics of a their consumer have been

market been have We a world. all around the in POSIT maker pools the

in POSIT They're run interaction, of nothing, but exchanges, has pools, call with. that XXX has Our Is you excited us to we dark the level transaction. got want whatever fabulous. that been about experience really of interact best the that Canada the one of

about of not obviously, further am this global institutional. concentration concerned it's all equities, is I market at the not making, So

the So that it's very say, day, different, an provider. synergistic ITG in agency unique tried of to the an classes before as and as and our And well has did both for end the reasons very broker, to I to that I other you And liquidity users. as going the asset analytics again, is at described think to get into accelerate ability terms as provide growth. end of Virtu

very of really of is Chris, revenue some are - will Virtu will about, be volatility think, consistency we Pro mute in most forma, us and in Knight and legacy non-transactional takeaway, terms to hopefully that it's real revenue, our to earnings around transactional excited I results, the it XXXX beyond. and XX%, obviously, important XX% but we diversifying base. So the our a our love in the revenue, bring

Joseph Molluso

Yeah, us right. - in I concerned equities U.S. add which short, think it not equities thing I also geographically, more we significantly is concentrating Chris, about. diversifies it's the think, globally is are But with I'd

get So Virtu's looking XX% to about on XX% And outside outside under business, franchise, you're period standalone we'll XX% the obviously, at, U.S. global is to the what depending ITG's U.S.

Operator

Optocas] Please comes question line go ahead. from Rener next Your [ph]. of the [Tony from Instructions] [Operator

line Your is open.

Unidentified Analyst

quick morning. good your the questions. deal? Is Hey, point on dividends, are new Two during dividends on - Congrats the just this? get deal. you there to able Is dividends

Douglas Cifu

policy yes. dividend continue, will Our

Unidentified Analyst

on break break it? reverse quickly is a mentioned you And fees fee

Douglas Cifu

No.

Unidentified Analyst

I have Congrats. Then good Okay. a one.

Douglas Cifu

you. Thank

Operator

time. are closing there And Instructions] turn Doug this back the now I questions for will to call at [Operator further no comments.

Douglas Cifu

them Operator, a could, see queue. if Alex take hold happy has to We in from call, follow-up I'm the on the he line. is one. Alex, back queue on. the I

Operator

comes question UBS. go the next Kramm Alex ahead. line of Please Your from from

open. Your line is

Alex Kramm

is going talk or since Yeah, for for think highlighted noted I the lot else, bit that already any Yes. through attractions that a sort how gave add, an are I a call earnings mean, there's you things you asked, and what this coming increased you follow-up. maybe in should think terms of I fourth stocks Thank bit business the my should I little taking I and being the rating, and can mean, base not can about I quarter, you dispersions, questions listen, example, on. little of a some of mean, single color is mean, But single well. be anything we doing Cboe volatility we mean, focused you

Douglas Cifu

our some Yeah, give business, Great goes commission-based Yeah. did without a the saying, about highlights, services I question. particular, in right. which execution it's excitement business, is -

well. of in we're unique in particular. Europe institutional access Coley, lot technology credit to my U.S. was we I So particularly and our now a in with it's guys, our remarks, integrated sales highly said But of the the dependent KCG one. to on what the relative a with volumes in or fully give Steve offering truly to volumes, homogeneous what now I in VES, terms having product in outperformed as particular, and And and liquidity

pretty But more realized So I of as is around I bit to you XXX%, changer you the they from right. Again, a as have quarter is a game that's also in Market to compared look significantly the to can of vis-à-vis up at the been October look always volumes quarter well been October same importantly, the in terms terms right I the segment. of think at metrics Making that out, which volatility as third third VIX. guys reference elevated

general would out they put multiply the right. It's out. you They don't actually by Yeah, I a So But down what little them a quarter say earnings just at XXX%, well our than can again, third look it's volumes retail more as Have that and little that. have. puts IBKR don't matter and gone take know. bit. is nuance I a October?

wrong. the that better I remarks quarter some days I that all guess, was here acquisition the this think It's in in time So, third as first misconstrued quarter. really I I better. guidance, in in give the first it, October would being said, in on talked I if one environment is people every couple - reasons, don't doing I had and because be And levels. in than of I would it, did what materially the said November my I meant. how do market We was the the we're of it about

of happy And from quarter. We'll We're what at with the bit message project. and see final But it's early continue the mid-term this night. integration to end marketplace mixed a obviously, We're day, we're elections undertake in return a volatility. last like of the getting away happens way up. our excited in is of the And it through. so, looks synergies. of terms here Obviously, about very pound to the KCG third very the we of the

Alex Kramm

a saw this maybe net for think think… I look don't just and I right, All assumptions like the in either. the I quick But you've deal, last rate interest obviously, shown presentation I page, interest. last But, on Joe, here. at if

Joseph Molluso

XXX. LIBOR plus

Alex Kramm

sorry. I'm

Joseph Molluso

plus XXX. LIBOR

Alex Kramm

Okay. I All sorry, missed if Thanks that. right, again.

Joseph Molluso

You didn't it. miss

Douglas Cifu

problem. No

Operator

Point. comes question Chris Please line go Allen ahead. the from of next Your from Compass

is open. line Your

Christopher Allen

out the plays guys just coming on I SEC. Hey, you and Roundtable it forward? how about follow just was broker to Basically, up the of changes recent thinking then the guys. I Data wondering Market moving wanted how are out disclosure

Douglas Cifu

forth. And some productive the was question. first And good there. I there and so Obviously, I back there panel. obviously, thought whatnot. was emotion was I Sure, some and on were

section with products, we approved submitted they'd basically as prop respect the that paraphrasing of over was be be cost a isn't the SEC And noncore and a about of day, then, was the about asked reasonable. you somewhat, review if market We a that and of to data which great It and the to that Securities products that core an well-known a connectivity this as the it's really compliance ago. of acts the with they will; that cost letter Virtu, be end i.e., they'd exchange. fees the at other think firms. of were Act the Exchange at year with arguably XX submitted with a that ensure very industry. We to retail connectivity cross fair undertake and you letter mandates respect requires time to what institutional, little just in XXXX, I

business exchanges. both is We're abroad anti-exchange. transparency. the and partners with They're other classes. We ultimately of with goal asset do business lot a here us. not value and just We them, Our

prior what the at this ends Securities and so life, just that noise isn't Exchange and I about Obviously, to statute, the and between been who the Circuit up. kind fight of brokers the the completely the opinion. commission for my That's I was XX I it's that view five Appeal banks of and that right some were In pay of a money, and the where lawyer, consistent we're statute us. brokers this to two There made stuff. of the fight about that fundamental that's to There we'll SIFMA impacts mandates like is the rule see fair these all here. what - appealed read exchanges. irrelevant Act. And read out. It's with the the for Act. a thought that they money, least So to DC Court that is that made obviously, virtue the that and a is of mandates is on this really of a the fairness, XX turned compliance But is we're focused said side around happy How be a are not kind nonsense then product. Act. I've that, of X ultimately always worth on not more cost X with all will And filings

doing last large is around continued transparency been that. and have that XX for all It's And of our a we're cost years. for fairness part basis. asking We the

pay they the cost less, so, if more, if cost we to want fair just products a And price.

three this the increases do. gets So that markets filing years, XXXX. determine then it reasonably the illusion if would and like here that I case, in as plays before some requests I out it's the right the U.S. there experienced. here And think couple back, - see because think since XXXs to optimistic just that the the the under I two in will a remanded ultimately I those in that no is be review that right think ultimately going the that. SEC, filings, to will we of am massive that's back And thing, I step of thing the that won't think Court, District ultimately, equities we to result, happened significant prices, but to the fairest rollback a as examination be there have not marketplace. next But over of I be But it's the

raise cost everything hard I pretty questions all heated And too we're friends. customers. So not among customers I I'm thing. continue we to That's do and it's Virtu not accesses voice charging, down tried that, and It's to of explain and around asking my same what transparency. come needs thoughtful are to our going customers the an when very of to our not do, and and our We exchanges do all are this possibly retail there. everybody all intelligent market the And to to Virtu. we participants, into when have much was why certainly market for. It's be saying are as can institutional get the for. It's services what that discussion our

former whatnot. to have ends I how So I goes. that's a up, transparency do see, right and lawyer, all around that intelligent we'll see. are where think lawyers I involved now thing that would know to this but we'll And the think And being know I be ultimately, and fairness. conversation

Christopher Allen

Thanks, guys.

Douglas Cifu

Thank you.

Operator

turn further the now no questions time. are closing back there this call over at to And Doug will I comments. for

Douglas Cifu

the is end a with question now call? and Zach in I'm just that Can we operator, question. and the have Stanley from we Actually, call, with then Zach's sorry, Morgan we'll noticed

Operator

Feierstein the next comes ahead. line of Stanley. go Your question Please from Morgan from Zach

Your line is open.

Zach Feierstein

taking for question. Thanks guys. the Hey,

historical do think agency the services you Just win really execution given not see what to want in to business, it's that and succeed DNA? your it in in takes long-term your view

Douglas Cifu

in for in business been so it's the right, it Knight has a Well, time. is Knight Obviously, DNA, the sure. great Yeah, question. a really long long,

segment, Commission, been the the complexity what where making the market competitive the I marketplace, back really same the that to in business thing go XX ultimately demanding not think scale. participants, not market is business have market the evolution, back In same institutional of to and seeing are technological or right. prices way going which for a years and forces, is the efficiency up. in spreads That's gone. going we has quarter, you're that commission automation, is are the bid experiencing last offer the so that agency

applying principles always technology, intermediary, because the model enterprise, agency scale The to a financial can a So about deliver classes. the you asset scale, being was exact simple pretty about it profitable function, technology to efficiency, same Virtu globally of automation being using apply those services business. and across be transparent institutional a and to

we're - the That's a transparent do an to proposition. So business has be and the what then explain we're geographies. going simplest that this be going make we're be going isn't we're across and client to and because scaled, to to to and and going possible way interest going for we're to efficient, we're asset in be simple we're going it's going that the understandable to A it to that we're do and we're and way we going provide a We're to did be can, market that. the going going then to classes to transparent. client right, efficient, accessing model, client most to science, be compensated virtuous, it across we best - automated, rocket in going service ultimately, we're

thousands right what doing. around And We the been customers has the globe that think so, premier brand we that. the of and thousands have with to trust that have we're think do acquired firm we today literally ITG around

technology, solution end trust going it the better to to much we're be for that extrapolate all and so, end using and the the product that transparency, And automation, do is have take user.

same to we've full market offering. technology really enable client's and stop. apply now applied trust, transparency philosophy segment, going we're the that It's the agency all to institutional a making to using to So interest, this about

Zach Feierstein

you like Thanks I base for initially. Could help just understand synergies there you modeling we about that the that KCG for in got if gap see XX% mentioned and me, maybe that. expense you in cost that from? what think is just Joe could there more upside And is where come deal ITG the us XX% one the potentially and

Joseph Molluso

look it's as a Yeah, out. you different well, point business

the GQS when wasn't number of different closed. that at out businesses there integrated really we And had legacy, business we were we the subsequent in materials that of business that fully closed. KCG, think you I a when pointed old get-go some the

So there of I a was think different bunch verticals. just

a global is business, a this think I more more concise business.

have we others. more solid is ITG's global Europe - we good extensive businesses we're - franchise in But don't So than Asia. have and

we in that trying we very good the achievable I looking about us. look in what's So at think front put are at and to number And of here. feel we

Zach Feierstein

it. Great. Thanks I for the color. appreciate

Joseph Molluso

you. Thank

Douglas Cifu

to to is people. terrific about them Thank acquisition. as getting today, wrap Obviously, truly them family. I'll and look the XX know everybody excited for about morning We I've you. operator, the And, said up some our time forward into with this you very a Virtu story. ITG we're this to global times Thank hear very, now. brand taking fabulous integrating

morning. So this everybody, thank you, for your time

Operator

This call. conference concludes today's

now may disconnect. You

Virtu Financial (VIRT) 7 Nov 182018 Q3 Earnings call transcript