More Alternative European Equities Platforms
By Jeremy Grant in London
Published: August 20 2008 15:59 | Last updated: August 20 2008 15:59
Up to three more alternative European equities platforms are in the pipeline in addition to the previously announced ventures such as Turquoise, BATS Trading and Equiduct, according to Fortis, the Belgo-Dutch bank.
The development could raise concerns over possible overcrowding as market participants vie to take advantage of the competitive forces unleashed by the Mifid rules liberalising equity trading across Europe.
Jan Bart de Boer, chairman of the supervisory board of European Multilateral Clearing Facility (EMCF), a clearing unit set up a year ago by Fortis to cater to the new equities platforms, said there were “two to three [platforms] waiting in the wings”. They were in talks with EMCF about the possibility of using it as their clearer.
Chi-X, majority-owned by broker Instinet Europe, was the first so-called “multilateral trading facility” (MTF) when it was launched 14 month ago. It was followed by PEX, a small platform for the Portuguese market.
Last week Turquoise, backed by nine investment banks, started limited operations ahead of a full launch across 12 European equities markets next month. Others preparing for launch are Nasdaq OMX Europe, a pan-European MTF backed by Nasdaq OMX, the transatlantic exchange operator, Equiduct, majority owned by Borse Berlin, and Burgundy, aimed at the Nordic equities markets and backed by leading banks and brokers in that region. Direct Edge, a US platform and rival to Kansas City-based BATS, has indicated it is considering coming to Europe.
“There are more of them coming and are already talking to us,” Mr de Boer told the Financial Times. “The inflow of new MTFs hasn’t stopped with these.” He declined to name them.
In the US, there are about 40 alternative trading platforms, including operators of “dark pools”. Some of the early platforms went out of business amid fierce competition or were bought by established exchanges.
Mr de Boer said there would likely be a similar proliferation in Europe. But “at a certain moment there will be winners and losers, and at some point they will be picked up by exchanges”.
EMCF provides post-trade services for Chi-X and has agreed to clear for Nasdaq OMX Europe. It is also likely to clear for BATS, Mr de Boer said.
The arrival of competition in European equities markets has already driven post-trade costs down, in addition to prompting cuts in exchange’s trading fees.
Copyright The Financial Times Limited 2008 |
