The value of trades matched on NYFIX Euro Millennium rocketed to more than EUR 1 billion in December from around EUR 178 million in November, following a series of initiatives to boost activity in the European dark crossing network. Matched volume also rose to 251 million shares in December from 45 million the previous month.
The pool also set two one-day records on 17 December when it matched 50.7 million shares representing more than EUR 150 million of value. It has gone on to beat the value record this year, matching more than EUR 200 million on 13 January.
Euro Millennium’s performance bucked the general trend in Europe in December, where equity trading activity declined overall. According to data vendor Thomson Reuters’ monthly market share reports, the value of European equity trades fell to EUR 960.7 billion in December from EUR 982.8 billion in November. Trading volume for the same period fell to 122.6 billion shares from 148.6 billion.
“[The success in December] was a combination of education about how to use the dark pool and momentum initiatives such as fee holidays and our ‘Experience the Dark’ programme, which encouraged firms to put more liquidity in the pool,” Chris Smith, director of NYFIX International, told theTRADEnews.com.
The fee incentives and ‘Experience the Dark’ programme took place in September and October in a bid to boost the pool’s hit rates. The firm also worked with brokers to ensure the Euro Millennium’s higher hit rates would register in their smart order routers’ logic.
“Going into November and December, we not only benefited from the fact that the sell-side had optimised the configuration of their smart order routers to take advantage of Euro Millennium, we had the first buy-side firms come in and get some good hit rates,” said Smith, who added that brokers had also started to rest orders in the pool for longer.
In the next two weeks, Euro Millennium will launch a central counterparty (CCP), which it has developed with Swiss clearing house SIX x-clear and investment bank BNP Paribas. The firm expects the new CCP to cut post-trade costs and risks through its netting service and real-time risk-management function. The platform also plans to enter more markets. It currently operates in Germany, France, Holland, Belgium, Portugal and the UK.
A further goal for 2009 is to attract more direct buy-side members. “Buy-side participation has been growing tremendously in the last six to eight weeks,” said Smith. “The average hit rate in December for the buy-side firms was approximately 40%.”