Low trading activity has led
the Australian Securities Exchange (ASX) to announce the closure of its
VolumeMatch large order execution system.
According to a notice posted
on the ASX website, VolumeMatch will close 10 November.
The platform, which launched
in June 2010, had a minimum execution size of A$1 million and segregated
proprietary trading flow from client trades.
Its closure follows an
admission from ASX earlier this year that VolumeMatch had been “unsuccessful” and that
its design and distribution model were “under review”.
was one of a series initiatives launched by the ASX in response to the
introduction of Chi-X Australia on 31 October 2011. Prior to the introduction
of a multi-market environment in Australia, the ASX upgraded its technology
platform to a new platform supplied by Nasdaq OMX, launched PureMatch, a
platform for high-frequency traders, and Centre Point, a mid-point dark trading
participants have suggested the requirement to separate prop from client flow
presented complexities for brokers and were a key contributor to the low
“ASX responded to
competition with VolumeMatch, among other initiatives, which was evidence of an
innovative and evolving market structure,” Ben Valentine, head of electronic
execution sales at Citi. “However, it appears that VolumeMatch wasn’t designed
in a way that best suited Australian market structure and its participants. On
the other hand, ASX’s Centre Point has gained traction since its inception last
year with a respectable market share of between 3-4%.”
Centre Point offers anonymous
execution at the prevailing midpoint of the best bid and offer of ASX and was
enhanced in July with functionality letting market participants stipulate the
minimum acceptable fill size for their orders.
Dark pool fragmentation
has accelerated in Australia in recent years with a total of 16 broker dark
pools and block crossing network Liquidnet now offering dark trading in
addition to Centre Point.