Nasdaq plans auctions-on-deman to enable large trades in Nordics

Service aims to meet MiFID II transparency requirements while providing way to execute larger blocks.

Nasdaq is introducing an aution format to enable larger trades to take place on its Noridic markets.

Auction of Demand (AoD) will enable traders to meet MiFID II transparency requirements and Nasdaq Nordic says it belives it will offer a regulated alternative to OTC and darkpool trading.

The AoD order book enables a seller or buyer to place an order at any time, entering it into a periodic auction. Once a matching bid comes in, an auction uncross will trigger and price and volume are made public. The auctions can take place throughout the day while the continuous order book is trading.

The system includes additional functions such as randomisation and minimum order sizes to ensure trading can take place safely in an open environment.

Nasdaq said it will begin testing the auctions on 20 March 2017 with the service scheduled to lauinch on 7 June 2017. All members trading shares on its main markets in Stockholm, Copenhagen, Helsoinki and Iceland will be able to access auctions via order entry protocols during regular trading hours.

Henrik Husman, vice p;resident of cash equities at Nasdaq, said: “Auction on Demand provides a new way of executing large orders, without disrupting the market, in a regulated and transparent trading environment, making Nasdaq Nordic an even more secure and liquid marketplace.”