The Nasdaq OMX Group is set to launch a pan-European trading platform for the most actively-traded European stocks.
The system’s launch strategy echoes that of fellow trading platform Turquoise: it will open in September 2008 and will trade around 300 of the most actively-traded European blue-chip shares. In a further nod to Turquoise, the new MTF will handle both displayed and non-displayed orders in one composite order book. Clearing will be handled through an as-yet-unnamed pan-European clearing facility and settlement will be done locally.
The new platform is called Nasdaq OMX Pan European Market, and is in the process of applying to be a multilateral trading facility (MTF) supervised by the UK Financial Services Authority (FSA). Its launch is subject to receiving FSA approval.
The group claims it is the first to connect to major European trading centres through what it describes as a sophisticated pan-European routing system. It also says the MTF will enable best execution in high-volume securities trading in a cross-border, multi-market environment. It will offer trading in the constituents of all leading European indices, including equities listed in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal, Sweden, Switzerland and the UK.
Nasdaq OMX Pan European Market will use Nasdaq’s INET technology platform, derived from INET ECN, which the exchange acquired in December 2005 when it bought Instinet Group. Nasdaq OMX claims this technology will allow the new platform to trade at sub-millisecond speeds. The firm adds that INET is capable of handling trading volumes of more than six billion shares a day, and routinely handles more than 250,000. It claims this will set a new standard for cross-border trading in Europe.
“European capital markets are facing a competitive transformation similar to changes experienced in US markets in recent years,” said Bob Greifeld, Nasdaq OMX’s CEO, in a statement. “We are positioning ourselves to serve our customers in the wake of a regulatory change that will break down monopolistic barriers that have survived in Europe but that will not hold in a post-MiFID environment.”
He added, “[Nasdaq and OMX] have a record of providing a better trading experience – such as execution speeds below one millisecond – while reducing costs to
The new MTF is Nasdaq OMX’s first initiative as a combined entity. The group was formed in March by the merger of US stock exchange group Nasdaq and Nordic exchange group OMX.