Exchange group NYSE Euronext will launch its new European retail trading service from 28 January next year.
The Retail Matching Facility will let members registered as retail member organisations execute order flow against price improving liquidity supplied by a new class of participants known as retail liquidity providers.
Retail liquidity providers will be obliged to offer liquidity at the European best bid and offer (EBBO) spread for at least 95% of the trading day.
Retail members can also execute their order flow against all of the liquidity on NYSE Euronext’s central order book.
Hosted on the bourse’s Universal Trading Platform, the new retail initiative will be available for blue chip stocks listed on the domestic exchange NYSE Euronext operates in Belgium, France, Holland and Portugal and will be open to the firm’s cash members.
“The aim of NYSE Euronext’s Retail Matching Facility is to promote a more competitive, transparent environment for retail investors than they currently achieve through bilateral, internal arrangements with intermediaries,” said Alicia Suminski, head of market and product development, European equity cash and derivatives, NYSE Euronext, upon initially revealing the plan in October.
Under current practice, retail brokers send aggregated orders to retail service providers that internalise the flow at a price at or better than the EBBO.
The European launch of the Retail Matching Facility follows a similar initiative in the US which went live on 1 August in a sign that exchanges are targeting a broader range of order flow, as equity trading volumes remain depressed. The US launch drew criticism from some market participants, primarily because of the market structure changes it required.