Nordic-only multilateral trading facility (MTF) Burgundy is to move its matching engines to Stockholm, in an effort to attract high-frequency flow to the venue. The decision follows an agreement with data centre-operator Interxion, allowing Burgundy to use the firm's Nordic Financial Hub, located in the city.
Burgundy, launched on 12 June 2009, was established by a group of Nordic banks and brokers and aims to become the leading platform for trading Nordic shares. Currently backed by 14 of the region's brokerage firms, Burgundy's owners collectively account for around half of all trading volumes in Swedish, Norwegian, Finnish and Danish equities. Previously, the firm's matching engine was based at an undisclosed location within the broader Stockholm area.
Customers will primarily gain capacity and latency benefits from the move, according to Erik Ellqvist, head of operations at Burgundy. The new centre gives clients the possibility of co-location for the first time, facilitating the entry of both market-makers and high-frequency traders to the venue.
“We aim to attract 25% of Nordic liquidity, and we believe we have the backing and the infrastructure in place to provide a highly competitive alternative market,” commented Olof Neiglick, Burgundy CEO. “Co-location services are a key element in our offer; a significant proportion of Nordic trading is currently conducted outside the region. As a result, there is a clear need for low-latency access.”
Kevin Dean, chief marketing officer at Interxion, said many banks' statistical arbitrage desks and high-frequency traders are currently locating their trading platforms in Stockholm as demand for co-location and proximity hosting services increases.
“By co-locating at Intexion, market participants can gain low-latency access to Burgundy and other Nordic liquidity venues, as well as reduce trading infrastructure costs by interconnecting with their counterparties located within the same data centre,” added Peder Bank, managing director, Interxion Nordics.
Burgundy recorded its second highest month in terms of trading activity in September, with €1.96 billion worth of Nordic equities suggesting continued fragmentation in the Nordic markets.