Retail-focused pan-European trading venue Equiduct will offer a 0.2 basis-point rebate for aggressive order flow on its lit order book and levy no charge for passive orders until the last trading day of December 2010. Previously, Equiduct had charged 0.3 bps for aggressive flow and offered a 0.15 bp rebate for passive orders.
CEO Peter Randall said that the promotion was intended to encourage business from both retail and institutional brokers.
“This is an opportunity to build the lit book which will have the net effect of giving our BEST retail book a powerful nudge in the right direction,” he said. “Hopefully when the promotion finishes, we will have built the retail business and the wholesale brokers will appreciate that Equiduct is a good place in which to execute business.”
BEST is a rebrand of Equiduct's PartnerEx service which can be used by retail order flow providers to agree best execution parameters with a market maker. Equiduct displays the best bid and offer available across multiple European trading venues for more than 1,000 securities and pledges to match the best price via its network of market-makers as well as minimising post-trade costs through various clearing and settlement providers.
To date, most new trading venues launched in Europe have targeted institutional flow only, but Randall believes that retail brokers are increasingly aware of the opportunity to differentiate to clients via lower execution costs. He added that Equiduct is starting to connect more retail brokers to its platform and is receiving an increasing number of enquiries from the sector.
“The second wave of MiFID should be about extending benefits about bringing the benefits to the retail market,” Randall said. “With roughly 30% of European securities transactions having a retail component or origin, we think this is an interesting area in which to be first mover.”
Equiduct was initially launched by Borse Berlin, but US-based market maker Citadel Securities took a majority stake in the platform in July 2009. In June this year, US broker Knight Capital also took a stake in Equiduct.
The trading venue is expected to receive a boost to volumes this month following an agreement to handle flow from customers of Nasdaq OMX Europe, a multilateral trading facility that closed operations at the end of June. Randall, formerly chief executive of Chi-X Europe, said Equiduct intended to be transparent about its volumes once it moved past launch phase.