Börse Berlin has revealed a price model for its pan-European Equiduct Trading platform, due to be launched in the middle of this year.
The exchange says Equiduct will dispense with percentage-based fee calculations in favour of charging a fixed sums for particular trade value bands.
Equiduct Trading’s order book, HybridBook, will charge execution fees that are related to the order size. For orders up to €5,000, the fee will be €0.20; for orders between €5,000 and €20,000, the fee will be €0.40; for orders between €20,000 and €50,000, the fee will be €0.70; and for any orders above €50,000, the fee will be €1.10.
Other features of the HybridBook are that there are no charges for market maker transactions or for principle passive orders, and immediate or cancel (IOC) orders will only be charged for the actual value traded.
The PartnerEx module of Equiduct, which the exchange describes as the new platform’s premium product, will provide the best available price for volume weighted best bid and offer (VBBO). This will be calculated from simulated partial executions on the relevant European reference markets – LSE, XETRA, NYSE Euronext and Chi-X. This will be extended to include new markets including Turquoise and NASDAQ/OMX European Blue Chips.
Börse Berlin believes that PartnerEx agreements forged between market maker and order-flow providers will guarantee the best transaction on the basis of VBBO for every individual order and allow price improvements.
Another key difference from competing systems, says Börse Berlin, will be that there is no added cost for partial executions, with only the first part of the execution charged.
Market makers and flow providers will be also be able to select the most cost-effective clearing and settlement mechanism, or bypass it altogether. Charges for these services are; for a volume of up to €5,000, the fee will be €1, for a volume of
€5,000 to €20,000, the fee will be €1.50, for a volume of
€20,000 to €50,000, the fee will be €2, and for any larger volumes, the fee will be €2.50.
Börse Berlin says Equiduct Trading’s VBBO is always available in real time and without charge. There are no connection charges or operating fees. Only the direct access to real-time data flows for market data (Levels I and II) from the HybridBook and PartnerEx is invoiced at
€30 a month.
Under the Equiduct pricing model, Börse Berlin says the revenue for Equiduct will come mainly from trading fees and the one-off fee of
€6,000 market makers will have to pay to use the service.
“Our fee model benefits the liquidity provider. With the HybridBook, we are establishing a leading position for prices in Europe, and the fees for PartnerEx correspond to the cost advantages we generate for customers,” said Artur Fischer, joint CEO of Börse Berlin Equiduct Trading.