Quote MTF, the pan-European equity trading venue, has signed letters of intent with seven companies for the provision of liquidity on its platform and aims to exceed €1 billion worth of daily trading soon after the deals are finalised.
Under the scheme, which comprises the market making divisions of three investment banks and four principal trading firms, Quote MTF will offer a total of 40% equity in return for liquidity provision. Liquidity providers will each receive an upfront stake and will then compete for the remaining portion of that equity based on the flow they provide.
The MTF has set a launch date of 4 April 2011 for the start of the liquidity agreements.
According to Christian Bower, head of sales at Quote MTF, two of the seven firms have already entered into contract discussions, with another two signing subscriber plans, indicating a willingness to join the platform before the April launch.
“The firms involved will have to provide a certain amount of passive liquidity to the platform,” Bower told theTRADEnews.com. “We think the start of this initiative will be the watershed event that encourages new members to connect to us. In the short-term, we are striving towards a daily target of €1.14 billion in average daily value traded soon after the deals are implemented.”
Quote MTF, which currently has half a dozen members and is regulated by the Hungarian financial regulator, claims to only require a fraction of the market share needed by other MTFs to be profitable. The platform is majority-owned by BRMS Holdings, which also has a stake in Canadian alternative trading system Omega ATS.