BATS Europe cuts latency via sponsored access

BATS Europe, the multilateral trading facility that entered the European market in October 2008, has confirmed it will offer sponsored access from 30 January 2009.

The move follows the introduction of similar functionality by the London Stock Exchange and Chi-X, both of which launched sponsored access on 5 January.

Sponsored access allows clients of trading venues members to connect directly to a trading platform, thus removing the need for broker intervention. Trades executed in this way are, however, still conducted in the name of the broker, which is ultimately responsible for ensuring buy-side traders adhere to trading venue rules. Sponsoring participants can offer clients direct connectivity to BATS Europe through proximity hosting in its data centres or via remote access.

Neonet links to Mexican Stock Exchange

Neonet, an agency brokerage and trading technology provider, is now offering trading access to the Mexican Stock Exchange – the broker's first foray into Latin America. The Mexican Stock Exchange is the second-largest equity market in Latin America based on trading volumes in 2007.

“As the capital markets continue to globalise, you can be confident that Neonet will extend its offering of trading at the world’s most competitive and liquid marketplaces,” said Simon Nathanson, CEO and president, Neonet, in a statement.

Lee Hodgkinson to quit SIX Swiss

Lee Hodgkinson, CEO of UK-based exchange SWX Europe, and head of the client and product management division and member of the management committee at SIX Swiss Exchange, SWX’s parent firm, is to leave the organisation at the end of April to pursue a new challenge.

Hodgkinson will remain in charge of his areas of responsibility until his final day with SIX Swiss Exchange. Hodgkinson’s departure follows SIX Swiss Exchange’s decision, announced last November, to close SWX Europe and transfer trading of Swiss blue-chip stocks from London back to Zurich. One of Hodgkinson’s roles was to head up the transfer project, which will be finalised by the end of June.

EU clearing mandate likely, warns Aite

European central counterparties (CCPs) must work together to make securities clearing and settlement cheaper and more efficient, or risk a European Commission (EC) mandate, according to the latest report from consultancy Aite Group.

The report, ‘EU trading, clearing and settlement: You say you want a revolution’, considers national differences between systems and management to be the key barriers to a harmonised pan-European clearing and settlement market. The report adds that regulatory variations between countries within the EU, such as tax codes, legal structures, currencies (outside the Euro currency zone) and settlement standards also prohibit interoperability between markets, clearing houses and central security depositories.

Three years after the introduction of its Code of Conduct on clearing and settlement, “many feel that the EC may be ready to issue a more forceful directive soon if participants in the market do not get the ball moving more quickly,” asserted the report.

GATElab adds Chi-X to MTF destinations

GATElab, a global connectivity and trading solutions provider, has completed testing on Chi-X, a pan-European multilateral trading facility.

GATElab’s institutional clients will be afforded immediate access to the trading platform. According to GATElab, establishing a gateway to Chi-X is an important addition to the firm’s existing trading suite for financial institutions, particularly its algorithmic offering.

“Through our streamlined business model, institutional investors are able to trade a wide range of European equities and achieve low-cost, high-speed trade execution, as well as potential price improvement,” commented Hirander Misra, COO, Chi-X Europe.

Published on January 14, 2009.

Nearly half of buy-side firms across Europe and the US are considering changing their OMS and EMS trading platforms, according to a study by research firm TABB Group. Survey respondents cited their desire to consolidate front-office systems and the pursuit of enhanced performance as the main drivers for changing systems.

The study, “OMS or EMS? The Buy-Side Perspective on Selection and Convergence”, reports that global spending on equity-focused OMSs and EMSs has declined 13% and 11% respectively since 2007.

“The days when growing asset bases resulted in an abundance of commissions – and investment banks could provide trading applications for free – are coming to an end,” said Kevin McPartland, senior analyst at TABB. He added that instead of selecting all and any systems, “In 2009, consolidation is the trend.”

Euronext’s single order book could cut post-trade costs for buy-side

NYSE Euronext today launched a Single Order Book in Europe, which unites trading, clearing and settlement across the group’s exchanges in France, Belgium and the Netherlands.

The new unified order book will make it easier for investors in these markets to effect cross-border transactions, according to Roland Bellegarde, group executive vice president and head of European execution at NYSE Euronext. “Traders can access and trade securities from other countries as if they were domestic securities,” he told the TRADEnews.com. “As of today, we have put the multi-listed French, Dutch and Belgian securities on a single order book and harmonised the rules and corporate actions.”

Before the launch of the Single Order Book, cross-border transactions were complicated because of the different ownership rules in the three countries. In France, for example, ownership technically began once an investor had committed to buy a stock. In the Netherlands, however, ownership commenced upon settlement – usually three days after the trade took place.