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Interactive Brokers Group considering transformation of market making segment, including sale

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Interactive Brokers Group considering transformation of market making segment, including sale

isconsidering major change for its market making business.

Duringa conference call to discuss second-quarter earnings, Chairman and CEO Thomas Peterffy said the operatingsegment's $5 million in pretax income for the quarter was the lowest reported innine quarters.

"Whilewe have been focusing on the brokerage business, the world has changed and leftus behind," Peterffy said. "The long-term trend is clear. We must transformin the coming years and we will."

Long-standinginvestor interest in turning Interactive Brokers into a pure-play brokerage businessplayed a role in the decision to review the market maker business, Peterffy noted.If the segment is spun off or sold, that capital would be added to the brokerageoperation, he said.

The executivesaid that selling the business is an option, as is "joining with" a proprietarytrading firm that currently does not operate as a market maker. When an analystasked whether Interactive Broker would consider building a platform similar to thatof Virtu Financial Inc.,Peterffy agreed, though he later walked back that comparison.

Whenanother analyst asked for more color on the idea of a Virtu-like operation laterin the call, Peterffy said he did not use the word Virtu.