Merrill Lynch said it will reduce its stake in FNN.

In a filing with the Securities and Exchange Commission, the company said it will transfer 500,000 shares of Santa Monica-based Financial News Network, along with shares in two related companies, to FNN’s New York-based parent, Biotech Capital Corp., in exchange for 1,060,000 Biotech shares. Merrill Lynch, one of the largest holders of FNN shares, said the exchange was intended to consolidate its investments. The transfer, which must be approved by the California Commissioner of Corporations, reduces Merrill Lynch’s stake in FNN to 4.9% from 9.5%.