Pan-European multilateral trading facility Nasdaq OMX Europe (NEURO) has announced that investment bank Barclays Capital has been approved as a sponsoring participant on its platform.
BarCap will be the first broker to offer its clients sponsored access using Nasdaq OMX Europe’s pre-trade risk management system.
Using sponsored access, BarCap clients will be able to connect directly to the MTF’s matching engine and onward routing service. Nasdaq OMX Europe’s pre-trade risk management layer will monitor all incoming orders and reject any trades that are deemed to breach pre-determined trading limits. Using sponsored access allows latency sensitive firms to reduce the time required to complete a trade. Trading firms can cut latency further if they are connected via proximity hosting.
“We are delighted to be working with Barclays Capital in providing their clients with access to NEURO,” said Charlotte Crosswell, president of Nasdaq OMX Europe. “Sponsored access provides new opportunities for a wide range of market participants to trade directly on our platform.”
Robert Orgel, head of Barclays Capital’s quantitative prime services product in Europe, added, “As the European trading landscape evolves, we continue to work closely with trading venues in order to offer new and innovative solutions to our clients. Sponsored access complements our market leading DMA platform, SubM, providing ultra low latency access to equities, futures and options markets globally.”
Sponsored access has faced increasing regulatory scrutiny over the past 18 months. In January this year the US Securities and Exchange Commission proposed a ban on ‘naked’ sponsored access, where brokers’ clients can trade on execution venues without the protection of risk controls. In November 2008 the UK Financial Services Authority issued a notice, Market Watch 30, reminding intermediaries that “full responsibility” for all client orders remained with them, even if pre- or post-trade controls and measures are carried out in conjunction with other parties.