What changed in this filing

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Item 1. Business

2021-02-25 compared with 2020-02-28 · 93 added, 85 removed, 265 unchanged (40% of the section changed)

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We interact directly with hundreds of retail brokers, Registered Investment Advisors, private client networks, sell-side brokers, and buy-side institutions.

On July 20, 2017 (the “KCG Closing Date”), we completed our all-cash acquisition (the “Acquisition of KCG”) of KCG Holdings, Inc.

KCG was a leading independent securities firm offering clients a range of services designed to address trading needs across asset classes, product types and geographies.

KCG combined advanced technology with specialized client service across market making, agency execution and trading venues and also engaged in principal trading via electronic market making.

On March 1, 2019 (the “ITG Closing Date”), we completed our acquisition of Investment Technology Group, Inc.

(“ITG”) for approximately $1.0 billion (the “ITG Acquisition”).

As described in “Acquisition of Investment Technology Group, Inc.” below, ITG was a global financial technology company that offered a suite of trading and financial technology products to help leading brokers and asset managers improve returns for investors around the world.

ITG empowered traders and investors to reduce the end-to-end cost of implementing investment decisions via liquidity, execution, analytics and workflow technology solutions.

We have two operating segments:

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Our management allocates resources, assesses performance and manages our business according to these segments.

We primarily conduct our Americas equities business through our SEC registered broker‑dealers.

We are registered with the Central Bank of Ireland and the Financial Conduct Authority in the UK for our European trading, the Investment Industry Regulatory Organization of Canada and the Ontario Securities Commission for our Canadian trading, and the Monetary Authority of Singapore, Securities and Futures Commission of Hong Kong, and Australian Securities and Investments Commission for our Asia-Pacific (“APAC”) trading.

We primarily conduct our Americas equities business through our SEC registered broker‑dealer, Virtu Americas, LLC ("VAL").

We are registered with the Central Bank of Ireland ("CBI") and the Financial Conduct Authority ("FCA") in the UK for our European trading, the Investment Industry Regulatory Organization of Canada (“IIROC”) and the Ontario Securities Commission for our Canadian trading, and the Monetary Authority of Singapore ("MAS"), Securities and Futures Commission of Hong Kong ("SFC"), and Australian Securities and Investments Commission ("ASIC") for our Asia-Pacific (“APAC”) trading.

We are registered as a market maker or liquidity provider and/or enter into direct obligations to provide liquidity on nearly every exchange or venue that offers such programs.

We engage regularly with regulators around the world on issues affecting electronic trading and to advocate for increased transparency.

In the U.S., we conduct our business from our headquarters in New York, New York and our trading centers in Austin, Texas and Chicago, Illinois.

Abroad, we conduct our business through trading centers located in London, England, Dublin, Ireland and Singapore.

In the U.S., we conduct our business from our headquarters in New York, New York and our trading centers in Austin, Texas, Chicago, Illinois and Short Hills, New Jersey.

Abroad, we conduct our business through trading centers located in London, England, Dublin, Ireland, Paris, France, Singapore, Hong Kong, and Sydney, Australia.

Market Making

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As a complement to electronic market making, our cash trading business handles specialized orders and transacts on the OTC Link ATS operated by OTC Markets Group Inc.

and the Alternative Investment Market of the London Stock Exchange (“AIM”).

We make markets in a number of different asset classes, which are discussed in more detail below.

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Efficiency and speed in performing prescribed functions are always crucial requirements for our systems, and generally we focus on opportunities in markets that are sufficiently advanced to allow the seamless deployment of our automated strategies, risk management system and core technology.

Our systems are monitored 24 hours a day, five days a week by our core operations team across our offices in North America, Asia Pacific, and Europe.

Our core operations team across our offices in North America, APAC and Europe monitors our systems 24 hours a day, five days a week.

This function provides coverage for our full technology platform, including our market data, order routing, transaction processing, and risk management technology modules.

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In other asset classes, metrics for execution quality are not prescribed by applicable regulation, and in many cases, are client defined.

We continually work to provide clients with high quality, low-cost trade executions that enable them to satisfy their fiduciary obligation to seek the best execution on behalf of the end client.

We continually work to provide clients with high quality, low-cost trade executions that enable them to satisfy their fiduciary obligation to seek the best execution on behalf of their customer.

We continually refine our automated order routing models so that we may remain competitive.

Global Equities

We trade over 25,000 listed Americas equity securities including, among others, equity related futures and exchange traded products, on thirteen U.S.

We trade over 25,000 listed and over-the-counter ("OTC") securities including, among others, equity related futures and exchange traded products ("ETPs"), on thirteen U.S.

Securities and Exchange Commission (“SEC”) registered exchanges and other market centers around the world, including the New York Stock Exchange (“NYSE”), the NASDAQ, NYSE Arca, Cboe BATS, Chicago Stock Exchange, the TSX in Canada, Bovespa in Brazil and BMV in Mexico, as well as other ATSs and more than 20 private liquidity pools.

Our strategy in the Americas and the rest of world is to utilize high speed, efficient connections to all of the registered exchanges and market centers, including the London Stock Exchange, Cboe Europe Equities, Euronext, Six Swiss Exchange, Australian Securities Exchange, Tokyo Stock Exchange and Singapore Exchange, as well as other trading venues and additional pools of liquidity to which we can gain access either directly or through a broker.

As exchange traded products, or “ETPs,” and other similar products have proliferated both domestically and internationally, demand has increased for trading the underlying assets or hedging such funds.

As ETPs and other similar products have proliferated both domestically and internationally, demand has increased for trading the underlying assets or hedging such funds.

Our technology has enabled us to expand into providing liquidity to this growing area by making markets across these assets in a variety of trading venues globally.

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We are authorized participants in over 2,000 ETPs and can create and/or redeem ETPs listed outside the Americas.

As of December 31,

2019 , we are the registered Market Maker in over 500 ETPs listed abroad.

We also hold a minority stake in SBI Japannext Co., Ltd.

(“SBI”), a leading Proprietary Trading System in Japan.

As of December 31, 2020, we are the registered Market Maker in over 500 ETPs listed abroad.

We also hold a minority stake in Japannext Co., Ltd.

(“JNX”), a leading Proprietary Trading System in Japan.

Global Fixed Income, Currencies and Commodities ( “ FICC ” ), Options, and Other

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Treasury securities and other sovereign debt, corporate bonds, and other debt instruments.

We trade these products on a variety of specialized exchanges, direct to counterparties, and other trading venues, including BrokerTec, eSpeed, DealerWeb, and BGS’s Fenics UTS.

We trade these products on a variety of specialized exchanges, direct to counterparties, and other trading venues, including BrokerTec, eSpeed, DealerWeb, and BGC’s Fenics UTS.

Our Currencies market making, including spot, futures and forwards, comprises our activity in over 80 currencies, including deliverable, non-deliverable, fiat, and digital currencies, across dozens of venues and direct to counterparties.

During the years ended December 31, 2019 , 2018 and 2017 , we were a leading participant in the major foreign exchange venues, including Reuters, Currenex, Cboe FX and NEX.

We are a leading participant in the major foreign exchange venues, including Reuters, Currenex, Cboe FX and NEX.

Our Commodities market making takes place on the CME, ICE, and Nasdaq Futures in crude oil, natural gas, heating oil, and gasoline futures.

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◦ institutional sales traders who offer portfolio trading and single stock sales trading providing execution expertise for program, block and riskless principal trades in global equities and ETFs;

matching of client conditional orders in POSIT Alert and in our ATSs, including Virtu MatchIt, POSIT and MATCHNow.

◦ matching of client conditional orders via POSIT Alert and in our ATSs, including Virtu MatchIt and POSIT.

• Workflow Technology, and our integrated, broker-neutral trading tools delivered across the globe including order and execution management systems and order management software applications and network connectivity;

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We offer agency execution services across multiple asset classes to buy-side clients including mutual funds, pension plans, plan sponsors, hedge funds, trusts and endowments and sell-side clients including global, national and regional broker dealers and banks in North America, Europe and Asia.

In 2019 our Execution Services segment did not have any client that accounted for more than 10% of our commissions earned.

In 2020, our Execution Services segment did not have any client that accounted for more than 10% of our total commissions earned.

Clients may access a broad range of products and services that includes electronic execution services in global equities via algorithmic trading, order routing and an execution management system (“EMS”) as well as internal crossing through our registered ATSs.

Our ATSs provide clients with anonymous sources of non-displayed liquidity.

Our ATSs provide clients with important sources of non-displayed liquidity.

We also offer clients voice access to global markets including sales and trading for equities, ETFs and options.

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Our clients may access a broad range of products and services that includes electronic execution services in global equities via algorithmic trading, order routing and an EMS as well as internal crossing through our registered ATSs.

Our algorithms and order routers help portfolio managers and traders to trade orders quickly, comprehensively and cost‑efficiently from our EMS or our Order Management System (“OMS”) and most third‑party trading platforms.

algorithms and order routers help portfolio managers and traders to trade orders quickly, comprehensively and cost‑efficiently from our EMS or our Order Management System (“OMS”) and most third‑party trading platforms.

Our institutional sales traders offer portfolio trading and single stock sales trading which provides execution expertise for program, block and riskless principal trades in global equities and ETFs.

We provide matching of client orders in our ATSs, including Virtu MatchIt, POSIT ATS, POSIT MTF, and MATCHNow.

We provide matching of client orders in our ATSs, including Virtu MatchIt, POSIT ATS, and POSIT MTF.

MatchIt provides two crossing sessions, a Main Session and a Conditional Session.

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In addition, POSIT MTF Auction provides frequent batch auctions which display indicative size/price prior to trade execution.

MATCHNow is an ATS for Canadian‑listed equities, operated by our wholly‑owned subsidiary, TriAct Canada Marketplace LP (“TriAct”).

MATCHNow is a dark pool ATS in Canada, offering a call auction marketplace with a non‑displayed book with trades executed at or within the Canadian National Best Bid and Offer.

Workflow Technology

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As an example, Triton Valor, the most recent release of our multi‑asset and broker‑neutral Triton EMS, helps to bring integrated execution and analytical tools to the user’s desktop, including the Algo Wheel, an algorithmic way for a portfolio manager to intelligently allocate volume between different providers.

Triton supports global list‑based and single‑stock trading, as well as futures and options capabilities and includes a fully integrated and supported financial services communications network (ITG Net).

Triton supports global list‑based and single‑stock trading, as well as futures and options capabilities and includes ITG Net, a fully integrated and supported financial services communications network.

Triton also provides traders with access to scalable, low‑latency, multi‑asset trading opportunities.

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ITG Net also integrates the trading products of third‑party brokers and ATSs into our OMS and EMS platforms.

RFQ‑hub, a multi‑asset platform for global listed and over‑the‑counter (“OTC”) financial instruments, connects buy‑side trading desks and portfolio managers with a large network of sell‑side market makers in Europe, North America and the Asia Pacific region, allowing these trading desks to place requests‑for‑quotes (“RFQ”) in negotiated equities, futures, options, swaps, convertible bonds, structured products and commodities.

RFQ‑hub, a multi‑asset platform for global listed and over‑the‑counter (“OTC”) financial instruments, connects buy‑side trading desks and portfolio managers with a large network of sell‑side market makers in Europe, North America and the APAC region, allowing these trading desks to place requests‑for‑quotes (“RFQ”) in negotiated equities, futures, options, swaps, convertible bonds, structured products and commodities.

RFQ‑hub is available as a stand‑alone platform and is also integrated with Triton.

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• Aggregate Exposure Monitoring.

Pursuant to our risk management policies, our automated management information systems monitor in real‑time and generate report on daily and periodic bases.

Pursuant to our risk management policies, our automated management information systems monitor in real‑time and generate reports on daily and periodic bases.

Exposures monitored include:

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The speed of communicating with exchanges and market centers is maximized through continuous software and network engineering innovation, allowing us to achieve real‑time controls over market exposure.

We connect to exchanges and other electronic venues through a network of co‑location facilities around the world that are monitored 24 hours a day, five days a week, by our staff of experienced network professionals;

connect to exchanges and other electronic venues through a network of co‑location facilities around the world that are monitored 24 hours a day, five days a week, by our staff of experienced network professionals;

◦ Our clearing system captures trades in real-time and performs automated reconciliations of trades and positions, corporate action processing, options exercises, securities lending and inventory management, allowing us to effectively manage operational risk;

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Trading notional limits are applied to customers and counterparts.

These are monitored throughout the day by trading support and risk.

These are monitored throughout the day by trading support and risk professionals.

• Liquidity Controls .

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Our trading and portfolio analytics compete with offerings from several sell‑side‑affiliated and independent companies.

POSIT and MATCHNow compete with various national and regional securities exchanges, ATSs, Electronic Communication Networks, MTFs and systematic internalizers for trade execution services.

POSIT and MatchIt compete with various national and regional securities exchanges, ATSs, Electronic Communication Networks, MTFs and systematic internalizers for trade execution services.

Our EMS, OMS, connectivity and RFQ services compete with offerings from independent vendors, agency‑only firms and other sell‑side firms.

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We believe that the high cost of developing a competitive technological framework is a significant barrier to entry by new market participants.

Technology and software innovation is a primary focus for us, rather than relying solely on

the speed of our network.

Technology and software innovation is a primary focus for us, rather than relying solely on the speed of our network.

We believe that our scalable technology allows us to access new markets and increase volumes with limited incremental costs.

Intellectual Property and Other Proprietary Rights

We rely on federal and state laws that govern trade secrets, trademarks, domain names, patents, copyright and contract law to protect our intellectual property and proprietary technology.

We rely on federal, state and international laws that govern trade secrets, trademarks, domain names, patents, copyright and contract law to protect our intellectual property and proprietary technology.

We enter into confidentiality, intellectual property invention assignment and/or non‑competition and non‑solicitation agreements or restrictions with our employees, independent contractors and business partners, and we control access to, and distribution of, our intellectual property.

As of February 21, 2020, we had approximately 1,012 employees, all of whom were employed on a full‑time basis and in good standing.

Human Capital Resources

As of February 19, 2021, we had approximately 976 employees, located in nine countries around the world, all of whom were employed on a full‑time basis and in good standing.

The approximate regional representation of our workforce is as follows:

74% Americas, 16% EMEA and 10% APAC.

None of our employees are covered by collective bargaining agreements.

We believe that our employee relations are good.

In shaping our culture, we aim to combine a high standard of excellence, technological innovation and agility and operational and financial discipline.

We believe that our flat and transparent structure and our collaborative and collegial approach enable our employees to grow, develop and maximize their impact on our organization.

To attract and retain top talent in our highly competitive industry, we have designed our compensation and benefits programs to promote the retention and growth of our employees along with their health, well-being and financial security.

Our short- and long-term incentive programs are aligned with key business objectives and are intended to motivate strong performance.

Our employees are eligible for medical, dental and vision insurance, a savings/retirement plan, life and disability insurance, and various wellness programs and we review the competitiveness of our compensation and benefits periodically.

As an equal opportunity employer, all qualified applicants receive consideration without regard to race, national origin, gender, gender identity, sexual orientation, protected veteran status, disability, age or any other legally protected status.

We seek to create an inclusive, equitable, culturally competent, and supportive environment where our management and employees model behavior that enriches our workplace.

In 2020, we formed a Diversity and Inclusion Committee (the "D&I Committee") to help further these goals and objectives.

The D&I Committee has focused on broadening recruitment efforts, increasing awareness of diversity and inclusiveness related issues through internal trainings and communications, and internal and external mentorship, including mentorships with New York City high school students.

Additionally, we have hosted an annual Women's Winternship program since 2019, which provides a week-long internship program aimed at introducing sophomore-level female college students to a career path in financial services and features over 30 instructors across the firm from various business lines and disciplines.

We conduct our U.S.

equities and options market making and provide execution services through our SEC‑registered broker‑dealers:

Virtu Americas LLC, Virtu ITG LLC, Virtu Financial BD LLC, Virtu Financial Capital Markets LLC, and Virtu AlterNet Securities LLC.

Both Virtu Americas LLC and Virtu ITG LLC are broker‑dealers regulated by the SEC and their designated examining authority is the Financial Industry Regulatory Authority, Inc.

Virtu Americas LLC is also registered as a floor trader firm with the Commodity Futures Trading Commission (“CFTC”), while Virtu ITG LLC is registered as an introducing broker with the CFTC and is a member of the National Futures Association (“NFA”).

Virtu Financial BD LLC is regulated by the SEC and its designated examining authority is the Chicago Stock Exchange.

Virtu AlterNet Securities LLC and Virtu Financial Capital Markets LLC are also regulated by the SEC and are members of FINRA.

Over the course of 2019, in furtherance of our integration efforts, we worked to consolidate U.S.

brokerage activity into Virtu Americas LLC and, to that effect, submitted applications to withdraw the SEC registrations of Virtu Financial BD LLC and Virtu Financial Capital Markets LLC.

We expect to continue this consolidation in 2020.

equities and options market making and provide execution services through VAL, our SEC‑registered broker‑dealer.

VAL is regulated by the SEC and its designated examining authority is the Financial Industry Regulatory Authority, Inc.

VAL is also registered as a floor trader firm with the Commodity Futures Trading Commission (“CFTC”).

As part of the Company's integration efforts, the Company consolidated the operations of its other historical U.S.

broker-dealer subsidiaries.

Specifically, the broker-dealer activities of Virtu Financial BD LLC and Virtu Financial Capital Markets LLC were consolidated within VAL as of December 31, 2019 and the SEC registrations were withdrawn in March 2020.

Subsequently, the Company consolidated the broker-dealer activities of Virtu ITG LLC and Virtu Alternet Securities within VAL as of June 1, 2020 and the SEC registrations were withdrawn in August 2020.

Our activities in U.S.

equities are primarily self‑cleared.

equities are both self‑cleared and rely on fully-disclosed clearing arrangements with third-party clearing firms.

We are a full clearing member of the National Securities Clearing Corporation (“NSCC”) and the Depository Trust & Clearing Corporation (“DTCC”).

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Our energy, commodities and currency market making and trading activities are primarily conducted through Virtu Financial Global Markets LLC.

We conduct our European, Middle Eastern and African (“EMEA”) market making activities from Dublin and through our subsidiary Virtu Financial Ireland Limited, which is authorized as an “Investment Firm” with the Central Bank of Ireland.

Virtu Financial Ireland Limited maintains a branch office in London.

We conduct our EMEA execution services trading activity from Dublin, London, and Paris through our subsidiary Virtu ITG Europe Limited.

Virtu ITG Europe Limited is authorized and regulated by the Central Bank of Ireland as an “Investment Firm” and maintains branch offices in London and Paris.

Virtu ITG Europe Limited’s London branch is registered with the UK Financial Conduct Authority (“FCA”) and its Paris branch is registered with the Banque de France.

Virtu ITG Europe Limited also operates a multi-lateral trading facility (“MTF”) in Ireland and Virtu ITG UK Limited, a U.K.

We conduct our European, Middle Eastern and African (“EMEA”) market making activities from Dublin and through our subsidiary Virtu Financial Ireland Limited ("VFIL"), which is authorized as an “Investment Firm” with the CBI.

VFIL maintains a branch office in London.

We conduct our EMEA execution services trading activity from Dublin, London, and

Paris through our subsidiary Virtu ITG Europe Limited ("VIEL").

VIEL is authorized and regulated by the CBI as an “Investment Firm” and maintains branch offices in London and Paris.

The London branch offices of VFIL and VIEL currently utilize the U.K.

FCA's Temporary Permissions Regime and are therefore deemed to be authorized and regulated by the FCA.

VIEL's Paris branch is registered with the Banque de France.

VIEL also operates a multi-lateral trading facility (“MTF”) in Ireland and Virtu ITG UK Limited ("VIUK"), a U.K.

investment firm, operates a MTF in the U.K.

Virtu ITG UK Limited is an investment firm which is authorized and regulated with the FCA.

We conduct our Asia-Pacific (“APAC”) market making activities from Singapore and through our Singapore subsidiary, Virtu Financial Singapore Pte.

VIUK is an investment firm which is authorized and regulated by the FCA.

We conduct our APAC market making activities from Singapore and through our Singapore subsidiary, Virtu Financial Singapore Pte.

Virtu Financial Singapore Pte.

is registered with the Monetary Authority of Singapore (“MAS”) for an investment incentive arrangement.

is registered with the MAS for an investment incentive arrangement.

We conduct our APAC execution services trading activity from Singapore, Hong Kong, and Australia through our subsidiaries Virtu ITG Singapore Pte.

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Virtu ITG Singapore Pte.

Limited is a holder of a Capital Markets Services License from the MAS, with the MAS acting as its principal regulator.

Virtu ITG Hong Kong Limited is a participating organization of the Hong Kong Stock Exchange and a holder of a securities dealer’s license issued by the Securities and Futures Commission of Hong Kong (“SFC”), with the SFC acting as its principal regulator.

Virtu ITG Australia Limited is a market participant of the Australian Securities Exchange (“ASX”) and Chi X Australia Limited, and is also a holder of an Australian Financial Services

License issued by the Australian Securities and Investments Commission (“ASIC”).

Limited is a holder of a Capital Markets Services License from the MAS, which is its principal regulator.

Virtu ITG Hong Kong Limited is a participating organization of the Hong Kong Stock Exchange and a holder of a securities dealer’s license issued by the SFC, which is its principal regulator.

Virtu ITG Australia Limited is a market participant of the Australian Securities Exchange (“ASX”) and Chi-X Australia Limited, and is also a holder of an Australian Financial Services License issued by the ASIC.

Virtu ITG Australia Limited’s principal regulators are the ASX and ASIC.

Our Canadian market making activities are conducted through our subsidiary Virtu Financial Canada ULC.

Virtu Financial Canada ULC is a Canadian broker‑dealer registered as an investment dealer with the Investment Industry Regulatory Organization of Canada (“IIROC”).

Virtu Financial Canada ULC is a Canadian broker‑dealer registered as an investment dealer with the IIROC.

Our Canadian execution services trading activities are conducted through our subsidiary Virtu ITG Canada Corp.

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The SEC, FINRA, CFTC, NFA, U.S.

state securities regulators, the European Securities and Markets Authority (“ESMA”) in the European Union, the Central Bank of Ireland, FCA in the UK, Banque de France in France, MAS in Singapore, SFC in Hong Kong, ASX and ASIC in Australia, IIROC and OSC in Canada, other SROs and other U.S.

state securities regulators, the European Securities and Markets Authority (“ESMA”) in the European Union, the CBI in Ireland, FCA in the U.K., Banque de France in France, MAS in Singapore, SFC in Hong Kong, ASX and ASIC in Australia, IIROC and OSC in Canada, other SROs and other U.S.

and foreign governmental regulatory bodies promulgate numerous rules and regulations that may impact our business.

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These increased obligations require the implementation and maintenance of internal practices, procedures and controls which have increased our costs and may subject us to government and regulatory inquiries, claims or penalties.

Failure to comply with any laws, rules or regulations could result in administrative or court proceedings, censures, fines, penalties, judgments, disgorgement, restitution and censures, suspension or expulsion from a certain jurisdiction, SRO or market, the revocation or limitation of licenses, the issuance of cease‑and‑desist orders or injunctions or the suspension or disqualification of the entity and/or its officers, employees or other associated persons.

Failure to comply with any laws, rules or regulations could result in administrative or court proceedings, censures, fines, penalties, judgments, disgorgement, restitution and censures, suspension or expulsion from a certain jurisdiction, SRO or market, the revocation or limitation of licenses and/or business activities, the issuance of cease‑and‑desist orders or injunctions or the suspension or disqualification of the entity and/or its officers, employees or other associated persons.

From time to time, we are the subject of requests for information and documents from the SEC, FINRA and other regulators.

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We cannot predict what effect, if any, future legislative or regulatory changes might have.

However, there have been in the past, and could be in the future, significant technological, operational and compliance costs associated with the obligations which derive from compliance with such regulations.

Regulators may propose market structure changes particularly considering the continued regulatory scrutiny of high frequency trading, alternative trading systems, market fragmentation, colocation, access to market data feeds, and remuneration arrangements such as payment for order flow, profit-sharing relationships, and exchange fee and rebate structures.

However, there have been in the past, and could be in the future,

significant technological, operational and compliance costs associated with the obligations which derive from compliance with such regulations.

Regulators may propose market structure changes particularly considering the continued media, congressional and regulatory scrutiny of U.S.

equities market structure, the retail trading environment in the U.S.

and relationships between retail broker-dealers and market making firms, high frequency trading, short selling, alternative trading systems, and off exchange trading generally, market fragmentation, colocation, access to market data feeds, and remuneration arrangements such as payment for order flow, profit-sharing relationships, and exchange fee and rebate structures.

The SEC and other SROs have enacted and are actively considering rules that may affect our operations and profitability.

Among these are changes the SEC has made to Reg NMS Rule 606, as well as changes the SEC is considering to Rule 605 which are intended to provide additional information on order routing and execution quality.

Regulation ATS-N recently became effective and requires operators of alternative trading systems to provide additional information regarding the ATS and other business of the operator that may pose conflicts.

Broker-dealers will be subject to the reporting requirements under the Reg NMS Plan providing for a Consolidated Audit Trail of equities and options data commencing in 2020.

The SEC has adopted NMS Rule 610T to conduct a transaction fee pilot (the “Pilot”) designed to generate data that will help the SEC analyze the effects of exchange transaction fee and rebate pricing models on order routing behavior, execution quality, and market quality generally.

Data from the Pilot will be used to facilitate an empirical evaluation of whether the exchange

transaction-based fee and rebate structure is operating effectively to further statutory goals and whether there is a need for any potential regulatory action in this area.

The Pilot implementation date has been stayed pursuant to the SEC’s Partial Stay Order of March 28, 2019.

In 2019, Regulation ATS-N became effective, requiring operators of alternative trading systems to provide additional information regarding the ATS and other business of the operator that may pose conflicts.

Broker-dealers became subject to the reporting requirements under the Reg NMS Plan providing for a Consolidated Audit Trail of equities and options data in 2020.

The SEC adopted NMS Rule 610T to conduct a transaction fee pilot (the “Pilot”) designed to generate data that will help the SEC analyze the effects of exchange transaction fee and rebate pricing models on order routing behavior, execution quality, and market quality generally, however, the current form of NMS Rule 610T and the Pilot were vacated by the Court of Appeals for the District of Columbia Circuit on June 16, 2020 pending further review by the SEC.

These changes and others impose additional technological, operational and compliance costs on us and creates uncertainty with regard to their effects.

On July 21, 2010, the Dodd‑Frank Act was enacted in the U.S.

Implementation of the Dodd‑Frank Act is being accomplished through extensive rulemaking by the SEC, the CFTC and other governmental agencies.

Implementation of the Dodd‑Frank Act has been accomplished through extensive rulemaking by the SEC, the CFTC and other governmental agencies.

The Dodd‑Frank Act includes the “Volcker Rule,” which significantly limits the ability of banks and their affiliates to engage in proprietary trading, and Title VII, which provides a framework for the regulation of the swap markets.

The CFTC has largely finalized its rules with respect to those swaps markets and participants it regulates, while the SEC has not yet completed all of its rules relating to security‑based swaps.

One of our subsidiaries is registered with the CFTC as a floor trader, and is exempt from registration as a swap dealer based on its current activity.

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The varying compliance requirements of these different regulatory jurisdictions and other factors may limit our ability to conduct business or expand internationally.

MiFID, which was implemented in November 2007, has been replaced by a more prescriptive MiFIR Regulation and MiFID II.

MiFID II represented the most significant change to take place in the operation of European capital markets to date and became effective on January 3, 2018.

MiFID II represented significant change in the operation of European capital markets and became effective on January 3, 2018.

MiFID II introduced requirements for increased pre- and post-trade transparency, technological and organizational requirements for firms deploying algorithmic trading techniques, restrictions on dark trading, and the roll out of a new bi-lateral OTC equity trading regime called the Systematic Internaliser regime.

MiFID II requires European firms to conduct all trading on European Trading Venues including Regulated Markets, MTFs, Organized Trading Facilities, Systematic Internalisers or equivalent third country venues, requires market makers, such as Virtu Financial Ireland Limited, to post firm quotes at competitive prices and supplemented requirements with regards to investment firms’ pre-trade risk controls related to the safe operation of electronic systems.

MiFID II requires European firms to conduct all trading on European Trading Venues including Regulated Markets, MTFs, Organized Trading Facilities, Systematic Internalisers or equivalent third country venues, requires market makers, such as VFIL, to post firm quotes at competitive prices and supplemented requirements with regards to investment firms’ pre-trade risk controls related to the safe operation of electronic systems.

MiFID II also imposed additional requirements on trading platforms, such as additional technological requirements, clock synchronization, microsecond processing granularity, pre-trade risk controls, transaction reporting requirements and limits on the ratio of unexecuted orders to trades.

The MiFID II regime is currently under review, with European Union authorities considering making further changes to the regime.

Various consultation papers have been published on different aspects of the MiFID II regime, including, on February 4, 2020, an ESMA Consultation Paper entitled “MiFID II/MiFIR Review Report on the Transparency Regime for Equity and Equity-like Instruments, the Double Volume Cap Mechanism and the Trading Obligations for Shares” and, on February 17, 2020, a European Commission public consultation on the review of the MiFIDII/MiFIR regulatory framework.

Various consultation papers have been published on different aspects of the MiFID II regime, including, on February 4, 2020, an ESMA Consultation Paper entitled “MiFID II/MiFIR Review Report on the Transparency Regime for Equity and Equity-like Instruments, the Double Volume Cap Mechanism and the Trading Obligations for Shares”, on February 17, 2020, a European Commission public consultation on the review of the MiFIDII/MiFIR regulatory framework and on December 18, 2020 an ESMA Consultation Paper entitled "MiFID II/MiFIR Review Report on Algorithmic Trading".

Further, in light of the U.K.'s withdrawal of its membership from the E.U., which is commonly referred to as "Brexit", the passporting regime under MiFID II, which enables firms to provide services to countries across the E.U., no longer encompasses the U.K.

VFIL and VIEL continue to service U.K.

clients by means of their London branches, however, in light of Brexit, these branches operate in the U.K.

not on the basis of MiFID II passporting rights, but on the basis of the U.K.

FCA's Temporary Permissions Regime, pursuant to which the London branches of VFIL and VIEL are deemed to be authorized and regulated by the FCA.

Each of these legislative and regulatory requirements imposes additional technological, operational and compliance costs on us.

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Certain of our subsidiaries are subject to regulatory capital rules of the SEC, FINRA, other SROs and foreign regulators.

These rules, which specify minimum capital requirements for our regulated subsidiaries, are designed to measure the general financial integrity and liquidity of a broker‑dealer and require that at least a minimum part of its assets be kept in relatively liquid form.

relatively liquid form.

Failure to maintain required minimum capital may subject a regulated subsidiary to a fine, requirement to cease conducting business, suspension, revocation of registration or expulsion by applicable regulatory authorities, and ultimately could require the relevant entity’s liquidation.

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Shares of our common stock generally vote together as a single class on all matters submitted to a vote of our stockholders.

On July 20, 2017, the Company completed the all-cash Acquisition of KCG.

In connection with the Acquisition of KCG, the Company issued 8,012,821 shares of the Company’s Class A stock to Aranda Investments Pte.

(“Aranda”), an affiliate of Temasek, for an aggregate purchase price of approximately $125.0 million and 40,064,103 shares of the Company’s Class A stock to North Island Holdings I, LP (the “North Island Stockholder”) for an aggregate purchase price of approximately $618.7 million, in each case in accordance with terms of an investment agreement in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act, (collectively, the “July 2017 Private Placement”).

On March 1, 2019, the Company completed the acquisition of Investment Technology Group, Inc.

and its subsidiaries (“ITG”) in an all-cash transaction valued at $30.30 per ITG share, for a total of approximately $1.0 billion (the “ITG Acquisition”).

As a result of the completion of the IPO, the Reorganization Transactions, the July 2017 Private Placement, and certain other secondary offerings and permitted exchanges by current and former employees of Virtu Financial Units for shares of the Company’s Class A Common Stock, the Company holds an approximately 64.1% interest in Virtu Financial at December 31, 2020.

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Viola, our Founder and Chairman Emeritus.

We have completed two significant acquisitions over the past four years that have expanded and complemented Virtu Financial's original electronic trading and market making business.

On July 20, 2017 (the "KCG Closing Date"), the Company completed the all-cash acquisition (the "Acquisition of KCG") of KCG Holdings, Inc.

In connection with the Acquisition of KCG, the Company issued 8,012,821 shares of the Company’s Class A stock to Aranda Investments Pte.

On March 1, 2019 (the “ITG Closing Date”), we completed our acquisition of Investment Technology Group, Inc.

(“ITG”) in an all-cash transaction valued at $30.30 per ITG share, for approximately $1.0 billion (the “ITG Acquisition”).

described in “Acquisition of Investment Technology Group, Inc.” below, ITG was a global financial technology company that offered a suite of trading and financial technology products to help leading brokers and asset managers improve returns for investors around the world.

ITG empowered traders and investors to reduce the end-to-end cost of implementing investment decisions via liquidity, execution, analytics and workflow technology solutions.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business