Top Instinet executives head for the door

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The top management of Instinet, the electronic broker majority owned by Reuters, has been eased out in a move seen as a prelude to a merger with a competitor.

Doug Atkin, chief executive officer at Instinet, resigned with immediate effect on Tuesday evening, after 18 years with the group. Kenneth Marshall, chief operating officer, announced his retirement.

The management shake-up followed a loss of market share, sagging volumes and a fierce price war in the US over brokerage charges. Reuters listed 17 per cent of Instinet on Nasdaq in May. However, the subsequent stock and results performance have been poor.

Instinet used to dominate the institutional market in electronic trading in the US with a 15 per cent market share. However, it has allowed competitors such as Island and Archipelago to steal up on it. Simon Baker, analyst at SG, said: "Atkin failed sufficiently to address increasing evidence of competition and he's paying the price."

Instinet has now launched a price war but there is little evidence this is helping it regain market share. The business may report its first quarterly loss next week and it will take a $55m (£38m) charge to cover cost-cutting measures.

Mr Baker said that the only way Instinet may now reestablish a market share that would justify premium pricing for its intermediary services would be to buy a rival.

It is thought that Reuters saw Mr Atkin as an impediment to this possibility.