Turquoise, the alternative trading venue majority owned by the London Stock Exchange (LSE), has confirmed that eight shareholder banks have signed up to trade on its new derivatives platform from 6 June.
The banks that will offer client access to Turquoise Derivatives, which will trade FTSE 100 futures contracts, include: Bank of America Merrill Lynch; Barclays Capital; Citigroup Global Markets; Credit Suisse; Goldman Sachs; J.P. Morgan; Nomura; and UBS. Other Turquoise shareholders that have not yet signed up include BNP Paribas, Deutsche Bank, Morgan Stanley and Societe Generale. The LSE acquired 60% of Turquoise in Q1 2010 and now owns 51% having sold 3% each to Barclay Capital, J.P. Morgan and Nomura.
Turquoise has also confirmed that a number of additional liquidity partners will provide flow to the platform from day one. Turquoise Derivatives' maker taker pricing structure will charge Â£0.20 for aggressive trades and offer a Â£0.05 rebate for liquidity providers. By comparison, trading derivatives on NYSE Liffe, which currently has a monopoly on FTSE futures, costs Â£0.25 on both sides. Clearing for Turquoise Derivatives will be provided by Anglo-French central counterparty LCH.Clearnet at a cost of Â£0.02. NYSE Liffe, which also uses LCH.Clearnet, charges Â£0.03 for each trade cleared.
“We are delighted to have the support of a number of banks and liquidity partners who share our vision of introducing a more competitive and open market for trading equity derivatives in Europe,” said Farnham. “Not only will our clients benefit from our innovative pricing model and reduced clearing fees but by using an established model, with an existing trading and clearing infrastructure, it will be simple for firms to trade FTSE futures on Turquoise. We have also engaged with all the important software vendors and clearing members to make this as seamless as possible for our clients.”
Turquoise Derivatives plans to extend the scope of contracts it offers, but has been refused a licence to offer products based on the EURO STOXX index, owned by Eurex, the derivatives exchange jointly owned by Deutsche Börse and SIX Swiss Exchange. Speaking to theTRADEnews.com earlier this week, Farnham said that Turquoise is involved in discussions with European competition authorities.
“We plan to come back to the market with a solution at some point this year,” he said.