The London Stock Exchange (LSE) is to release new functionality on its market from 30 April that will give members a five-minute opportunity to cross stock at the closing price.
The new continuous trading period will take place between 16.35 and 16.40, immediately after the exchange’s closing auction and will be available for the LSE’s SETS order book as well as its International Order Book.
The LSE says the new functionality has been introduced in response to customer demand.
Orders that remain on either book after the closing auction will be available for execution in the new closing price crossing auction, unless they are entered with a time-in-force value or good for auction tag. Any new orders entered during the session would have to be priced at the closing price or market order. Trades can be cancelled during the five-minute period.
An analysis from Credit Suisse’s Advanced Execution Services (AES) division doubted the impact the new crossing session would have on liquidity at the LSE, noting that a similar scheme at NYSE Euronext accounts for only 0.13% of trading turnover in CAC40 stocks, 0.16% in Dutch AEX blue chips and 0.2% in BEL20 stocks.
“The futures market is likely to remain the best way to gain market exposure after the official close,” read the AES research, noting that 8.5% of turnover in the FTSE 100 future is transacted after the close of the cash market.
“If Euronext’s trade-at-last session is any indicator, the [LSE’s] closing price cross is unlikely to boost the LSE’s figures significantly. But as they say: every little helps,” added the research.
Since the introduction of MiFID in 2007, the LSE has seen its market share slide from 100% to just over 50% at the end of last month, according to data from Thomson Reuters.