Instinet

, a unit of

Reuters

(RTRSY)

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, scrubbed plans to offer an equity trading service for retail investors through

Instinet.com

, attributing the decision to a downturn in the online brokerage market and slowing trading activity.

Reuters, a media company based in London, had been planning to give individual investors the chance to trade stocks online with Instinet.com, but said in a statement today that the retail service will instead be offered through Instinet's wholesale business.

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Instinet has already completed the development of a new system for direct online retail brokerage. Elements of the service will be combined with Instinet's existing ability to serve retail investors through other firms who use the agency broker for executing and clearing trades.

Reuters originally expected to launch Instinet.com last May, but said at the beginning of June that the starting date had been postponed until the fourth quarter. In October, Reuters

disclosed plans for an initial public offering of the company's Instinet operation.