TradeTech Europe 2014 News: Turquoise, GH Financials and more…

Turquoise, the pan-European multilateral trading facility (MTF) majority owned by the London Stock Exchange Group, recorded its second largest day of trading yesterday, topping €5 billion across its dark and lit books.

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Turquoise reports second-highest trading day

Turquoise, the pan-European multilateral trading facility (MTF) majority owned by the London Stock Exchange Group, recorded its second largest day of trading yesterday, topping €5 billion across its dark and lit books.

On 8 April, Turquoise traded €5.4 billion in total, with €4.996 billion of business executed across its lit book alone. The MTF accounted for around 11% of all European equity trading.

Yesterday’s volumes were only exceeded during one trading day in August 2011, when activity on all European trading venues rose in volatile market conditions caused by the euro crisis.

Speaking to at TradeTech Europe 2014 in Paris, Turquoise CEO Robert Barnes predicted further growth for the platform as the market increased its focus on block liquidity in response to restrictions on dark trading due to be imposed by MiFID II.

“The demand for more mechanisms for trading blocks plays to our Uncross facility and the fact that we prioritise size over time,” he said.

In March, Turquoise grew its share of the European equity market from 7.86% to 8.81%. Over the same period, Europe’s biggest exchange operator by volume, BATS Chi-X Europe, saw its market share drop to 19.66% from 20.97%.

Last week, Turquoise confirmed it is looking to introduce a new dark block trading service later this year in preparation for incoming MiFID II rules. Under the new block trading model, currently named Block Discovery, a counterparty will send a block indication, or a parent order, to find a match. The block indication allows counterparties to place an order without locking it in until they have a match, so members can also send smaller orders to other dark pools and recall them if necessary. When the Block Discovery service finds a match for the large order, it will send an order submission request to both sides of the trade. Once the match is agreed, both counterparties will then send a passive order to Turquoise Uncross for final matching. 

Uncross randomised auctions occur between five and 45 seconds, preventing orders from interacting with more time-sensitive flow.

Next month, the European Parliament is expected to vote through rules that limit the amount of trading that can be done in dark MTFs under MiFID II, placing limits of 4% on the amount of trading in an individual stock in individual dark pools and 8% across the European market. However, the rules do not impact trades executed using the existing large-in-scale pre-trade transparency waiver, which permits trades above a certain size to be executed off-exchange.

GH Financials partners with Orc for options technology

Clearing and settlement services provider GH Financials is expanding its business into options clearing using technology from Orc.

The deal will enable GH Financials’ clients to access markets with low latency and European Securities and Markets Authority compliance. Orc’s solution also offers advanced pre-trade risk management tools.

Steve Martin, COO of GH Financials, said: “Orc’s ability to deliver their comprehensive solution as a managed service and an unparalleled combination of risk and compliance, market access and execution capabilities were the key factors for our selection. We are also impressed by Orc’s roadmap, which confirms that their long term view is aligned with our strategic intentions.”

GH plans to move into the options market by tailoring its buy- and sell-side offering to assisting high-frequency derivatives trading.

Orc’s solution is planned to be deployed in Q2 2014 and will also accommodate GH Financials’ growth into Asia, where it recently opened a Hong Kong office.

SmartTrade wins spread-betting client

Financial spread-betting and trading firm CMC Markets is to use smartTrade Technologies’ LiquidityFX cloud-based solution for trading FX and precious metals.

According to smartTrade, CMC Markets’ traders will be able to trade in a fully disclosed bilateral manner through the LiquidityFX API or UI, with a range of passive or aggressive order types.

“We have seen tighter spreads and improved fill ratios thanks to the no brokerage fee model offered by smartTrade and the benefit of being cross-connected to our liquidity providers,” said Greg Niebank, Group Head of Product at CMC Markets.

LiquidityFX is a trading system for spot FX, swaps, non-deliverable forwards and precious metals. The platform offers aggregation, smart order routing, and order and risk management functionality and charges users no volume-based fees. SmartTrade provides liquidity management systems used by banks to develop multi-asset trading platforms and provides connectivity to more than 40 liquidity providers.

Founded in 1989, CMC is a provider of financial spread-betting, contracts for difference and FX trading services, with offices across Europe and Asia.

Macquarie’s Delaware sets sail on Charles River

Deleware Investments, a US-based global asset management firm with US$185 billion in assets under management, has gone live on the private cloud-based Charles River Investment Management Solution for portfolio management and trading equity assets, and compliance monitoring for all equity and fixed income asset classes across the firm.

A subsidiary of Australian financial services provider Macquarie Group, Delaware Investments is also using Charles River's broker-neutral FIX Network and administration. Following an eight-month implementation, the system supports Delaware Investments users in multiple offices on a single platform. 

“Charles River has simplified our workflows, increased productivity for portfolio and compliance officers, and allows our traders to react more quickly to market opportunities," said Philip Russo, chief administrative officer, Delaware Investments. 

EuroCCP consolidation complete

The consolidation of pan-European equities-focused clearing houses EuroCCP and EMCF has been completed, the merged entity – EuroCCP NV – has announced. The merger creates Europe’s largest cash equities central counterparty (CCP).

The consolidation of 20 clearing participants and six trading platforms – Equiduct, GetMatched, NYSE Arca, Smartpool, Sigma X and UBS MTF – took place over seven weeks.

EuroCCP said the merger had provided clearing participants with overall annual savings in excess of €10 million through reduced settlement costs, volume discounts on clearing fees and elimination of one set of connectivity and interoperability costs.

 “We are clearing for 16 trading platforms; this reach makes a positive difference to our clients’ clearing related costs. For example, 50% of their settlement costs have been cut where they previously needed to settle with two different CCPs,” said Diana Chan, CEO of EuroCCP.

Headquartered in Amsterdam, EuroCCP clears equities, exchange-traded funds and depositary receipts from 18 markets including the United States. The company is equally owned by BATS Chi-X Europe, NASDAQ OMX, ABN AMRO Clearing Bank and by The Depository Trust & Clearing Corporation.