Turquoise, the pan-European multilateral trading facility owned by the London Stock Exchange (LSE), has released new details relating to the launch of equity derivatives trading functionality in Q2 this year.
LSE chief Xavier Rolet announced his firm's intention to challenge the derivatives trading duopoly currently held by Eurex and NYSE Liffe during the exchange's half-yearly results presentation in mid-November 2010.
“We think competition from venues like Turquoise can enhance the quality and liquidity in the derivatives market – just as it did for cash equities,” said Rolet at the time.
According to a technical notice seen by theTRADEnews.com, derivatives trading on Turquoise will be based on SOLA, a trading platform developed by the Montréal Exchange, the derivatives exchange operated by Canada's TMX Group that is already in use by the LSE.
Borsa Italiana, the domestic Italian exchange owned by the LSE migrated to SOLA for derivatives trading at the end of 2010, while EDX London, the LSE's market for Scandinavian and Russian derivatives products, switched to SOLA in December 2009.
Turquoise's derivatives offering will be based on European index futures and options and single-stock futures and options across the region's markets. The exchange is likely to start with products based on the FTSE 100 index.
Derivatives traded on Turquoise will be cleared using a combination of CC&G, the Italian clearing house owned by the LSE, and LCH.Clearnet, which is already used for clearing equity trades on the UK cash market. Execution fees will be charged using a maker-taker model.
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