Burgundy, a pan-Nordic multilateral trading facility backed by 14 of the region’s financial firms, has set its full launch date for 4 June and revealed details of its pricing schedule.
Like its pan-European counterparts, Burgundy will employ a maker-taker structure, which rewards liquidity posters and charges those who remove liquidity. For tier-one Nordic stocks (the 15 most traded instruments) the rebate for posting liquidity (passive) will be 0.15 basis points while the charge for removing liquidity (aggressive) will be 0.3 bps. Tier-two stocks (the next 35 most traded stocks) will rebate members 0.1 bps for passive orders and charge 0.3 bps for aggressive orders.
Tier-three stocks (mid- and small-caps) and exchange-traded funds (ETFs) will be charged at 0.1 bps for passive orders and 0.3 bps for aggressive orders. Discounts for tier-three and ETF trades will be available for negotiated transactions that report their post-trade data to Burgundy (50%) and for brokers that use the platform to cross trades with themselves (25%).
Dark orders will use MiFID’s large-in-size pre-trade transparency waiver, which requires orders to be a minimum proportion of the average daily turnover and market capitalisation of a stock, as defined by the Committee of European Securities Regulators, and are charged at 0.40 bps for both aggressive and passive orders.
Burgundy will commence trading in a limited number of Swedish stocks on 8 May, and trading of all listed shares in Norway, Denmark, Finland and Sweden will begin on 4 June. Testing has already begun on the platform and approval from the Swedish Financial Services Authority is expected soon.
The platform will use pan-European clearing house European Multilateral Clearing Facility as its central counterparty from October 2009.
Burgundy’s backers are: Avanza Bank, Danske Bank, D. Carnegie & Co, DnB NOR, Evli Bank, HQ Bank, Kaupthing Bank (Sweden), NeoNet, Nordea, Nordnet, SEB, Svenska Handelsbanken, Swedbank and Öhman.