Aquis Exchange is planning to focus on building market share in key stocks within the markets it already serves as part of the market’s second quarter growth strategy.
The London-based multilateral trading facility was launched in November last year by former Chi-X Europe CEO Alasdair Haynes, touting a unique pricing model based on the telecoms industry.
It launched offering trading in leading French, Dutch and UK stocks and expanded its share universe to key German names in January.
Speaking to theTRADEnews.com, Haynes said: “At the end of our first quarter of trading, the focus is going to be on growing our share of the markets we’re already in. The key to breaking into a market is to have good trading volumes of 5% or more in some of the key names and we’ve seen some major stocks starting to reach that level.”
Highlights include reaching 4% of trading in London-listed commercial property giant Land Securities on 5 February and 2% of Dutch insurer Aegon on 27 February.
Total trading on Aquis reached €83.6 million in February according to figures from Thomson Reuters Equity Market Share Reporter, more than double the €40 million it saw in January and Haynes was confident volumes will rise as more members are onboarded.
“We’re talking to about 40 potential members and already have 12 of those on board and trading and expect to bring on more in the second quarter,” he said.
Aquis had hopes firms would onboard more quickly but the scale of regulatory changes facing the industry means many have to prioritise their activities this year.
Haynes also believes the Aquis pricing model will prove attractive as firms take on recent regulatory proposals to increase transparency on the way dealing commissions are used.
In November 2013, UK regulator the Financial Conduct Authority published a consultation paper, suggesting that asset managers should take more care over the way dealing commissions are used to pay for execution and research and increase transparency of where client money is spent.
Haynes explained: “The pricing model has been well received and one of the things traders really like is that it’s transparent. The FCA has put a big focus on transparency of execution costs and our simple pricing structure means that brokers can tell their clients exactly how much the execution cost.”
He said the traditional maker-taker pricing model used by many exchanges was highly opaque, with many brokers unable to put a precise number on the cost of executions until they receive their trading bill from an exchange.