(1888PressRelease)
August 20, 2008 - London, Monday - ARANCA NEWSTRACK – After over a year of delays, the platform opened to limited trading and will operate mostly for testing purposes until its full launch in mid-September. As part of limited live trading, Turquoise, currently offers trades in 10 shares – five each from the UK and Germany. By mid-September, Turquoise will offer trading in over 1,200 stocks across 13 markets will be offered in late September.
Launched by nine leading investment banks in Europe – BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Merrill Lynch, Morgan Stanley, Société Générale and UBS – Turquoise is guaranteed support from a very powerful consortium. These nine banks together account for half the order flows in Europe.
Established European exchanges including London Exchange Group and the Deutsche Borse have for long enjoyed monopoly over the trading business of securities. Large banks, including the nine sponsors of Turquoise, have for long complained about the relatively high fees charged on trading of securities. With Turquoise, the banks hope to pare down their trading costs.
Turquoise follows the launch of Chi-X, the other Multi Trading Facilities (MTFs) launched in April 2008. Chi-X has proven to be an early success, capturing an average daily market share of nearly 10% in trading volume of FTSE 100 stocks. Like most MTFs, its operating model offers cheaper fees and a faster electronic trading network than the established players.
The MTFs came into play with the rolling out of the Brussels Markets in Financial, Instruments Directive (MiFID) , which ultimately aims to overhaul Europe’s exchanges industry. Among other aspects, MiFID requires "best execution" in trading and clearing of stocks. Best execution of a trade includes all relevant criteria such as cost, speed, likelihood of execution and likelihood of settlement. The MiFID directive has thus paved the way for MTFs.
Other MTFs which are currently being readied for launch include: Nasdaq OMX Europe, backed by Nasdaq OMX, the transatlantic exchange operator; BATS Trading, out of Kansas City, and Equiduct, majority-owned by Börse Berlin.
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