Turquoise, a pan-European multilateral trading facility (MTF), will allow members to formalise privately-negotiated transactions by bringing them onto its trading platform from 1 October.
To be conducted on the MTF, a negotiated transaction must involve the transfer of a MiFID-regulated security that trades on Turquoise between two members of the platform according to its own specific rules.
The transaction must be flagged as negotiated and priced at or within Turquoise best bid and offer – the best displayed bid and offer on the MTF. Where there is no bid or offer, the transaction must be priced within a 10% range of the Turquoise last trade price. Where there is no last trade price, the counterparties must use the Turquoise reference price.
During the MTF’s pre-opening phase, the reference price is the previous closing price or closing price adjusted for any corporate action that has taken place overnight. After opening, the last auction price is used as the reference.
Chi-X Europe already offers negotiated transactions to its clients.
Negotiated transactions is one of a series of new functions recently introduced by Turquoise. In July, the MTF launched TQ Lens, a dark liquidity order routing and aggregation service. Turquoise will also offer trading in depository receipts, starting with the 10 most liquid on 2 October and the full range of 120 of the most heavily traded instruments on 16 October.
Turquoise had market share of 3.94% of pan-European on-order-book trading in the week ending 25 September, according to the Fidessa Fragmentation Index.