This summer will see the launch of yet another pan-European multilateral trading facility, Quote MTF, a Hungarian-based platform that will offer liquidity from third-party market-makers from launch.
Quote MTF is 60% majority-owned by BRMS Holdings, which already owns stakes in Canadian alternative trading venues SwiftTrade and Omega ATS. The firm is building its own proprietary trading system from scratch and has already agreed a deal with a central counterparty, which it expects to announce within a few weeks. Quote MTF’s projected Q2 launch could take the number of pan-European blue-chip MTFs to six, pending the launch of NYSE Arca Europe by exchange group NYSE Euronext, due to start trading in Q1 2009.
“We think we will have a number of factors that will differentiate us from the rest of market,” Gabor Kutas, member of the board, Quote MTF, told theTRADEnews.com. “We will have a different pricing model to the others, which we will elaborate on in due course, and will be among the most aggressive for paying liquidity sponsors, who will be making markets from day one. Additionally, there are no banks or incumbent exchanges with stakes in the platform, so there will be no political issues.”
So far, all pan-European MTFs – Chi-X Europe, Turquoise, BATS Europe and Nasdaq OMX Europe – have financial backing from investment banks or exchange groups.
Although its operations will be centered in Budapest, the Quote MTF matching engine will be based in London, like the other pan-European MTFs, to ensure it can be accessed at low latency. According to Kutas, its Hungarian headquarters will help keep costs low.
“By running the business out of Budapest, we will have significant cost advantages that we will be able to pass on to our clients through our pricing structure and liquidity provision rewards,” he said. “This will ultimately improve the quality of liquidity on our platform and make it an essential trading venue for market participants.”
Quote MTF is likely to have a soft launch, starting with a few stocks from each of the major European indices upon its launch.