Instinet to Acquire Institutional Brokerage

Reuters Group’s Instinet Corp., which runs the largest private trading network in the U.S., agreed Wednesday to buy Lynch, Jones & Ryan, an institutional brokerage.

Reuters didn’t disclose the purchase price, saying the cost wasn’t “material.” Lynch Jones had assets of $19 million as of Sept. 30, according to Reuters.

Lynch Jones says it’s the largest provider of “commission recapture programs.” In these arrangements, institutional brokers agree to rebate a percentage of their commissions to clients, such as pension funds or insurance funds.

Purchasing Lynch Jones, with more than 750 investment manager customers, will help Instinet win new business, said Davis Gaynes, executive vice president of Instinet.

Moreover, he said Lynch Jones will be able to use Instinet’s electronic system to trade Nasdaq shares.

Lynch Jones currently trades about 1 billion shares a year, most of them on the New York Stock Exchange, said Howard Schwartz, the firm’s chief executive.

As part of the transaction, Instinet will own 9.9% of Lynch Jones’ NYSE floor brokerage operation.

Reuters’ American depositary receipts (RTRSY) gained 6 cents to close at $61.31 on the NYSE.