Quote MTF, a Hungarian-based pan-European trading venue, is confident of securing liquidity from smart order routers (SORs) from launch because of its pricing model, which it claims will be the cheapest in Europe.
The platform will charge 0.14 basis points for removing liquidity and will not pay a rebate for posting it. By comparison, rival MTF Chi-X Europe charges 0.3 bps for removing liquidity and rebates 0.2 bps for adding liquidity.
“There has been a lot of talk about price improvement, but it seems as though market-makers do not adjust their quotes on different venues based on rebate levels,” Gabor Kutas, member of the board, Quote MTF, told theTRADEnews.com. “Therefore, we believe the differentiating factor will be the cost of execution and that we will be the first destination for smart order routers given our low removal rate.”
Quote MTF is backed by Canadian firm BRMS Holdings, which also owns Canadian alternative trading system SwiftTrade. BRMS has agreed to provide liquidity to the platform via its algorithms.
“BRMS has over 4,000 traders across 23 countries worldwide, so it will have a significant amount of flow to put through the platform,” said Kutas. “However, we are not just counting on BRMS, and we have been across Europe signing up members.”
The platform, which will have its head office in Hungary but its matching engine in London, was originally due to launch on 5 June. This has now been postponed until 5 September because budgetary and time constraints caused by the financial crisis have delayed the connection of major members.
Nevertheless, Quote MTF has continued ramping up its capabilities, and has signed connectivity deals with BT Radianz, Savvis, TNS, Reliance Global, Colt and Atrium and Interxion.
It has also recently completed internal testing of its trading platform, a proprietary system developed by BRMS. The platform will offer around a dozen blue-chip stocks during its soft launch phase and will expand its coverage to include all constituents of the STOXX 600 index as well as exchange-traded funds.