Aquis Exchange, the London-based multilateral trading platform (MTF) founded by former Chi-X Europe CEO Alasdair Haynes, executed its first equities trades yesterday with no reported systems problems or glitches.
According to Haynes, the MTF traded stocks from all three of the markets in which it currently offers trading services: the UK, France and the Netherlands. Haynes expects all eleven trading members that have so far connected to the venue to conduct test trades before the end of the week.
“So far there have been no issues with connecting, trading or reporting in the live production environment,” Haynes told theTRADEnews.com. “We are very encouraged by the fact that the system has proved it works in every market. We are not expecting material volumes before Christmas, but we aim to add liquidity day by day. This is a marathon not a sprint.”
Initially launched in October 2012, and authorised by the Financial Conduct Authority earlier this month, Aquis offers subscription-based pricing, meaning revenues are generated by participants’ message traffic independent of the price of the securities they trade. The firm’s pricing structure is tiered by message activity to attract as wide a variety of members as possible, including retail brokers and other low volume users.
“We’re finding huge support across the industry both from the sell-side and the buy-side. People don’t like the present duopoly they find in most European markets between the national exchange and BATS Chi-X,” said Haynes.
Aquis intends to add around half a dozen more trading members in January and to widen the number of stocks available to trade from the current 165 across three markets to 1,000+ across 14. More than 40 firms are engaged in projects to connect to Aquis in the next six months and those that go live by mid-January will qualify for fixed pricing throughout 2014. The firm intends to broaden its instrument universe beyond equities in due course.
Unlike many other trading venues launched in the last decade, Aquis’ ownership stricture includes no trading members, brokers or electronic market makers. The Warsaw Stock Exchange took a 30% stake in August, but the rest of the equity is shared between high net worth investors (45%) and staff (25%). Aquis’ 30-plus staff includes 17 former employees of Chi-X Europe, the trading venue acquired by BATS Global Markets in November 2011, and – as part of BATS Chi-X Europe – is Europe’s largest single equity market operator by volume, according to Thomson Reuters data.
The firm is understood to have sufficient finance in place to test the market’s appetite for its subscription model for 12-18 months.“We’re not looking to take business off MTFs; we want to change how the market operates. If it works, the industry will be different forever,” said Haynes.