Three large institutional brokers – Merrill Lynch, JP Morgan Cazenove and BNP Paribas – have joined UK small- and mid-cap stock exchange PLUS Markets and connected to its trading platform.
The banks have become members of PLUS to make markets in so-called Nuclear Power Notes – instruments linked to contingent value rights whose coupon is based on wholesale energy prices, issued in connection with French energy company EDF’s planned takeover of British Energy. These notes will be issued by Barclays Bank and will trade exclusively on PLUS-quoted, the group’s market segment for unlisted securities.
The three banks can use their PLUS membership to participate in the exchange’s other initiatives. Although the vast majority of trading on PLUS is currently retail-based, the exchange plans to attract more institutional trading volume. These include the PLUS Pool non-displayed liquidity facility, and the PLUS HQ hittable quotes board, which allows institutional orders to interact with retail flow. The firm expects to launch both in Q1 this year.
“Accessing a new market provides us with an opportunity to look at other areas where we can execute business efficiently, particularly at a time when PLUS is expanding its market model,” said Rob Tarr, director of market structure at Merrill Lynch International, in a statement.