Latest Content » OPERATIONS, TRADING & TECHNOLOGY  » Trading and Exchanges

— Alasdair Haynes, ITG

Euro Millennium, which Nyfix launched in March, claims to be the first truly independent European ‘dark pool’. Peter Guest asks whether dark liquidity is a new phenomenon and looks at the confusion over the terminology that surrounds it.

— Alasdair Hodge, Barclays Capital

The buy-side should ask hard questions of its chosen DMA provider on market coverage, the algorithms offered as well as the algorithmic platform. Roger Aitken explains.

Many argue that demutualisation of stock exchanges has lead to greater innovation and investment, but are they looking out for stockholders over users? Roger Aitken reports.

The bids rejected by the LSE could end up being as good as it gets. Will this high-risk strategy pay off, asks Roger Aitken.

FTM: Looking at the wider theme of stock exchange consolidation in Europe and North America, where are we likely to be in five years time?

MC: In the medium term, Europe will take some important steps forward in the consolidation process, because undoubtedly consolidation could create more value for everyone in the market place.

FTM: What is your perspective on exchange consolidation from the Nordic region, particularly given your former involvement with the Stockholm Bors?

SN: While consolidation is valuable to a point, the large exchanges have now reached a stage where further consolidation may compromise operational efficiency and decrease pressure on costs.

FTM: What will exchange consolidation mean for the post-trade arena?

PF: The key to reducing cross-border transaction costs in the post-trade securities industry is to reduce the fragmentation of technology systems, market practices, laws and regulations.

FTM: How will the two primary exchanges in the US fare post-Reg NMS? Can the US regional exchanges compete effectively against the New York Stock Exchange (NYSE) and Nasdaq?

KZ: Nasdaq, as a fully electronic exchange, will have an easier time adjusting to the new environment in contrast to the NYSE, which is still grappling with the concept of a ‘hybrid’ market.

FTM: Although the immediate impact of Reg NMS has been well documented, what do you view as the long-term impact on ECNs and US exchanges from Reg NMS?

HS: As a result of Reg NMS, Celent believes electronic communications networks (ECNs) will be able to more deeply penetrate exchange-listed trading, well outside their traditional dominance in over-the-counter (OTC) securities trading.

— Johannes Luef, VP Securities Services

The Nordic region has set a good example of infrastructural consolidation in its stock exchanges, having utilised cutting edge technology to produce standardised trading rules. Driving the industry further forward is a desire to remain competitive with Europe and the US, says Roger Aitken.

The pace of infrastructural consolidation and the development of technology-led trading tools in the Nordic region has been relatively fast-paced when compared to a number of other European countries.

NOREX was the first stock exchange alliance in the world to introduce a common trading system, harmonised trading rules and membership requirements.

— Beckley: ‘Enron a galvanising factor’

FTSE and ISS solicit industry-wide opinion in order to establish corporate governance rating system.

Almost 90 per cent of respondents in an industry-wide consultation conducted by FTSE, the index-provider, and Institutional Shareholder Services (ISS) said they expect corporate governance issues to grow in importance over the next two years.

The findings came in the process of developing the methodology behind the FTSE ISS Corporate Governance Index (CGI) Series and CGI ratings.

By using these ratings investors are able identify and manage corporate governance risk within their global portfolios.

Chris Gibson-Smith, chairman of the London Stock Exchange (LSE), has warned that the recent spate of proposed exchange consolidations in the US will lead to greater economic competition for Europe.

Royal Bank of Canada (RBC) has joined forces with Dexia to create one of the world’s top 10 global custodians with $1,800bn (€1,400bn) in combined client assets under custody.

A mere handful of listed companies believe that the much touted takeover of the London Stock Exchange (LSE) would be beneficial to them, with a third fearing it would damage their position, a survey has revealed. Increasing listing fees and migration of businesses offshore were also among predicted problems.

— Clemens Reuter, SWX

As the first commodity exchange traded fund is launched on Deutsche Börse and SWX Swiss Exchange, Roger Aitken reports on the growing market for ETFs in Europe.

While the market for exchange traded funds (ETFs) in Europe has recently celebrated only its fifth birthday and is dwarfed by a US market dating back 12 years, last month’s launch of the world’s first ever commodity ETF on the Deutsche Börse and SWX Swiss Exchange might prove a defining moment.

Distrust among European custodians as well as competing platform providers make a unified trading system as far away as ever. Yuri Bender explains.