The Wall Street Journal reported Wednesday that the TMX Group, the company that owns Canada's largest stock exchange, is in talks to acquire Direct Edge Holdings, an electronic exchange company.
Direct Edge is the fourth-biggest U.S. market operator, handling almost 10 per cent of the daily trading in American stocks.
Its owners include Wall Street investment banking giant Goldman Sachs.
The Journal did not name its sources.
TMX, the operator of the Toronto Stock Exchange, is itself in the sights of a consortium of banks, The Maple Group, as an acquisition target.
On Wednesday, the Maple Group appeared to have cleared the final regulatory hurdles to its takeover, with both the federal Competition Bureau and the Ontario Securities Commission giving their approval, until the British Columbia Securities Commission outlined a series of demands it had before signing off.
The Journal said negotiations between TMX and Direct Edge won't be concluded, if at all, until the deal with the Maple Group is made final.