Swiss investment bank UBS has launched its non-displayed multilateral trading facility UBS MTF, as a separate offering to its PIN internal crossing network.
UBS MTF will be the first broker operated trading venue to use a central clearing model. Unlike PIN, which matches the bank's client flow on a selective basis, UBS MTF will match orders on a non-discretionary basis and include direct market access and proprietary flow from within the bank. Orders will be matched based on the mid-point price of the primary market, allowing the MTF to forego pre-trade transparency requirements under MiFID.
Trades will be cleared by pan-European central counterparty SIX x-clear, although UBS intends to add EuroCCP to its list of clearers once regulators approve interoperability models. All executions will be reported in real time to Markit BOAT.
“UBS MTF is open for business as a venue available to participants seeking to limit the potential for market impact,” said Robert Barnes, UBS MTF's CEO. “We've created this facility to deliver the best practices of efficiency, fair access and client choice in the equities markets.”
“The new UBS MTF is an important step forward in widening the types of liquidity available to clients, which translates to improved crossing opportunities and support for non-discretionary orders,” added Tim Wildenberg, head of Direct Execution, EMEA, UBS.
UBS MTF received regulatory approval from the UK regulator, the Financial Services Authority, in August 2010 and obtained authorisation to admit Swiss-based members in September 2010.