London-based exchange SWX Europe is hoping to expand the client base and scope of its non-displayed liquidity pool, SWX Swiss Block, following its launch on Monday.
“We are lining up another tranche of customers to go live, and by the end of the year we expect our members to grow to between 25 and 30 firms,” Lee Hodgkinson, CEO of SWX Europe, told theTRADEnews.com. “We will also consider expanding the service to mid- and small-cap Swiss securities, where some would argue dark trading has a sweet spot.”
The new dark pool went live with 11 clients on Monday. These are ABN AMRO (a subsidiary of Royal Bank of Scotland), Bank Vontobel, Citi, Credit Suisse, Deutsche Bank, Instinet Europe, Lehman Brothers, JPMorgan, Merrill Lynch, NYFIX International and UBS.
Hodgkinson says the launch was glitch-free, but declined to give trading statistics for the first two days. “Not only is this a new technology, but it is a behavioural change for investors to get used to,” he says. “We need a little time to build substantial liquidity, and will be putting out regular stats in about three months’ time.”
Hodgkinson acknowledged that Swiss Block now faces the challenge of building liquidity in competition with several other new entrants. Recent newcomers include Baikal, a dark pool jointly conceived by the London Stock Exchange and Lehman Brothers, and agency broker Instinet’s BlockMatch.
But he believes Swiss Block, which is powered by trading technology firm NYFIX’s Euro Millennium dark pool platform, is up to the task. “I think that together with NYFIX we form a compelling proposition, and I’m looking forward to the months ahead,” he said.