Turquoise, a pan-European multilateral trading facility (MTF) scheduled for launch in September, is to begin its daily trading at 07.45, compared with 08.00 at rival trading venues such as the London Stock Exchange.
Turquoise’s 07.45 start will comprise an opening auction in its integrated market – the top 300 stocks trading simultaneously in Turquoise’s lit and dark books – plus the beginning of normal trading in the platform’s 1,200-stock dark-only segment.
The MTF has decided to start its trading day early to create momentum that it hopes will continue once other exchanges open for business. Turquoise believes that without opening early, trading volume on the platform could develop more slowly during each trading day.
However, once Turquoise gains momentum and market share, the MTF may move the opening time to compete directly with the exchanges, dependent on feedback from its members.
The decision caught some members of its newly formed buy-side advisory panel, which convened for the first time last month, by surprise. “It was met with suspicion and scepticism by the panel,” said Tony Whalley, investment director at Scottish Widows Investment Partnership (SWIP). “Our experience at SWIP is that brokers believe they don’t make a lot of money from pre-market trading.”
He added, “I just wonder what is in it for them. Such a move would certainly give us a better indication of price formation pre-market, but I would have expected the brokers to be far more wary of agreeing to it.”
Whalley said the meeting had been constructive overall. “They (Turquoise) introduced ideas to see how we felt. They were genuinely looking for advice, rather than saying, ‘This is what we’re doing, like it or lump it’. It was good to be included in the process and be asked to provide input,” he said.