Turquoise, the pan-European multilateral trading facility (MTF) majority-owned by the London Stock Exchange, is introducing a new pricing promotion for Spanish stocks that threatens to further erode the share of incumbent exchange group Bolsas y Mercados Españoles (BME).
Beginning 1 May, the promotion will last for six months and includes a passive rebate on the six most liquid Spanish stocks, from 0.2 to 0.4 basis points. There will also be a higher rebate of 0.5 basis points awarded for incremental passive business above €120 million a month and the introduction of 0.2 basis points take fee for aggressive business.
The move by Turquoise follows the relative success of a similar Spanish pricing promotion introduced by rival MTF Chi-X Europe in October last year. Chi-X Europe has run its price promotion since October, providing a rebate of 0.3 basis points on passive executions for selected securities, including trading, clearing and settlement costs. In February, Chi-X increased the rebate paid on passive executions from 0.2 basis points to 0.3 basis points for executions in all IBEX35 securities from 1 February to 31 March. The IBEX35 index comprises the top 35 most liquid Spanish stocks.
The Chi-X promotion gained the platform significant equity market share (4.7% by February, 4.4% in March) from the BME, which until recently had a near-total monopoly in the country. Chi-X Europe’s pre-promotion market share was 2%.
“We are delighted to introduce this new promotion to our customers, which will make Turquoise the most attractive venue for trading the six most liquid Spanish stocks,” said Adrian Farnham, CEO at Turquoise.
The BME retained 92.7% of Spanish market share in March – the lowest figure yet recorded. Turquoise market share for March was 0.69%, according to data provided by Thomson Reuters.