Exchange group NYSE Euronext has received approval to launch a new trading venue for international companies that wish to list in London, designed to further unify its global trading offering.
The new platform, NYSE Euronext London, will compete directly with the London Stock Exchange's (LSE) International Order Book (IOB), a service that provides traders with access to securities via global depository receipts across 46 countries. NYSE Euronext says it is already in discussions with a number of firms looking to list on the new service.
According to Ronald Kent, executive vice president for international listings and head of NYSE Euronext London, NYSE Euronext's new offering would deliver greater access to liquidity created by the group's unified approach to trading services.
“NYSE Euronext London will become part of our existing group of European exchanges in Lisbon, Amsterdam, Paris and Brussels,” Kent told theTRADEnews.com. “We are trying to make the sales and trading side uniform and seamless, so investors have the ability to access our liquidity pool regardless of where a listing originates.”
NYSE Euronext London has launched on the exchange's group Universal Trading Platform (UTP), a single trading engine and point of connectivity for its markets. NYSE Euronext's European cash markets have already migrated to the UTP and the exchange is currently in the process of rolling out its derivatives markets on the platform. The group's US cash markets will follow suit in early 2011.
As part of the initiative, a new regulatory framework will govern the exchange group's European operations. NYSE Euronext will submit to governance under a ”college of regulators' structure. The four regulators governing NYSE Euronext's European cash markets – the Belgian Banking, Finance and Insurance Committee, the French Autorité des Marchés Financiers, the Netherlands Authority for Financial Markets and the Portuguese Securities Market Commission – along with the UK's Financial Services Authority, which will govern NYSE Euronext London, will send a representative to govern the group's European operations from each domicile on a rotating six-month basis. Kent claimed the structure would be effective in attracting international listings.
As well as its IOB, international companies can also list on the LSE's main market, but have to adhere to stricter corporate governance and regulatory restrictions. The LSE's IOB has recently added central counterparty services for 70 of its most heavily traded securities.
Like its other cash markets, NYSE Euronext London will initially use LCH.Clearnet for central counterparty services before moving to purpose built clearing houses by 2012.