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Saturday, February 28, 2009

Eurex offers incentives to boost CE Europe trading

European derivatives exchange Eurex, a joint venture between Deutsche Börse and SIX Swiss Exchange, has launched an incentive programme to encourage more trading from brokers in central and eastern European countries. The programme is aimed at traders who have not been active on Eurex and want to expand their proprietary trading in the exchange’s products.

The initiative, an extension of the exchange’s Trader Development Program that was introduced in July 2007, will allow traders in central and Eastern Europe to trade up to 500,000 contracts per location – with a maximum of five locations per member – in a 12-month period without incurring any trading or clearing fees. If members reach the 500,000 threshold in the first 12 months, they will be able to trade 1.5 billion contracts free of charge in the second year.

Patsystems provides DMA to Brazilian derivatives market

Patsystems, a derivatives trading solutions provider, has become an independent software vendor for the derivatives segment of Brazilian exchange BM&F BOVESPA, allowing the firm to offer clients direct market access (DMA) to Brazil's derivatives market.

Patsystems will also enable access to BM&F products via CME Globex, an electronic trading platform operated by the Chicago Mercantile Exchange. This will allow CME customers to trade the main BM&F derivatives contracts listed on the Globex platform.

All BM&F segment products will be available through Patsystems’ front-end products, J-Trader and Pro-Mark, and supported by the firm’s pre-trade System and Risk Administration (SARA) module. SARA specifies the order types and risk limits a user can apply, along with appropriate threshold values for issuing alerts.

European equities trading jumped in January – Reuters

The total value of equities traded in Europe increased to EUR 934 billion in January from EUR 821 billion in December, according to data provider Reuters’ monthly European market share report. January volumes were also up, growing to 152 billion shares from 123 billion in December.

European equity values are still below the EUR 982 billion reported by Reuters in November 2008, but volumes are up on November’s 148 billion shares.

In line with the overall increases in January, many exchanges and multilateral trading facilities enjoyed a boost in market share. For example, the London Stock Exchange’s share of the overall value traded in Europe increased to 18.68% in January from 18.58% the previous month, and its share of the volume grew to 41.61% from 37.02%. Chi-X’s value market share grew to 5.08% from 4.71%, and its volume market share increased to 4.05% from 4%. Turquoise’s value market share increased to 2.78% from 1.89%, an

Nomura rebuilds connections to ex-Lehman platform

Nomura has added buy-side trading tools provider TradingScreen to its list of vendor connections in Europe, as the Japanese bank rebuilds links to the electronic trading platform acquired from Lehman Brothers’ European operation last September.

Nomura relaunched the former Lehman platform on 12 January and has rebranded it ModelEx. The ModelEx suite of tools includes direct market access (DMA), smart DMA, algorithms and dark pool services across Europe.

“We took the top tier of software vendors that delivered the previous Lehman Brothers electronic trading suite and are in the process of establishing these connections for our new Nomura offering,” Andrew Bowley, head of electronic trading product management, Nomura, told theTRADEnews.com. “We are now connected to eight software vendors and hope to add more in the near future.” Nomura declined to name the other software vendors.

Burgundy and HKMEx sign up to new surveillance tool

Burgundy, a Nordic multilateral trading facility, and the Hong Kong Mercantile Exchange (HKMEx) have signed up to Scila Surveillance, a new market surveillance tool jointly developed by systems provider Cinnober and technology firm Scila. The firms said the new system can be implemented on any trading system on the market.

Scila Surveillance is designed for exchanges, banks and regulatory bodies. According to the two firms, the focus of their partnership was to develop a solution with a shorter time-to-market, low cost of ownership and improved usability compared with other surveillance systems.

“Confidence is one of the most important assets for any marketplace and where a modern and effective market surveillance tool is a key component”, said Olof Neiglick, CEO of Burgundy, in a statement. “I’m impressed with the Scila system, especially the connectivity solution, which allows for a quick and efficient implementation.”

FIX updates FAST Protocol

FIX Protocol Ltd (FPL), developer of the FIX financial messaging standard, has launched version 1.2 of FIX Adapted for Streaming (FAST) Protocol, its data compression standard.

The new version improves the ability to use FIX with FAST, specifically with regard to enumerations, time stamps and boolean data types. The improvements in the new version have been developed to be fully compatible with FAST version 1.1. According to FPL, the enhancements allow for greater efficiency gains.

The FAST Protocol was developed in response to increasing electronic trading volumes and market data messaging rates. FAST uses techniques such as implicit tagging, field encoding and binary representation of data to reduce message sizes, therefore cutting bandwidth requirements and latency.

Chi-X fees a tenth of European incumbents’ – TowerGroup

Chi-X, a pan-European multilateral trading facility, will continue to siphon liquidity from exchanges because of its low transaction costs – up to a tenth of those charged by the incumbents – according to a new study from research and advisory firm TowerGroup.

The study compared Chi-X’s explicit and implicit trading costs with those of the London Stock Exchange, NYSE Euronext and Deutsche Börse in both high- and low-volume scenarios from October 2006 to October 2008. All three domestic exchanges combined account for roughly 70% of total European equity trading.

TowerGroup found that in a high-volume scenario, where trading volumes were 500,000 trades a month, worth a total of worth EUR 5 billion, executed on a 50/50 passive/active ratio and with an average trade size of EUR 10,000, the total explicit costs of trading on Chi-X were EUR 50,000, less than a fifth of the LSE’s EUR 258,001 and around a tenth of Deutsche Börse and NYSE Euronext’s costs of EUR 525,000 and EUR 497,500 respectively. Explicit costs include trading and clearing fees.

nstinet to launch new US dark pool within two months

Instinet, a global agency broker, is scheduled to release a new dark pool in the US within the next two months.

BLX is expected to be a block-only venue which will complement CBX, Instinet’s existing US dark pool. CBX passively exposes orders to Instinet’s US order flow and allows access to its liquidity via algorithms.

In addition to CBX in the US, Instinet also operates JapanCross, KoreaCross and CBX in Asia, as well as BlockMatch, a European non-displayed venue, which does not allow flow from investment banks’ proprietary trading desks and lets clients decide whether or not to display their intentions.

BofA names execution team following Merrill takeover

Bank of America, an investment bank, has named the executives that will run the combined execution team created by the merger with global broker-dealer Merrill Lynch, which it bought last September.

Roger Anerella, head of global execution services, will lead the team. Ashok Krishnan retains responsibility for EMEA execution services and Michael Lynch will lead execution services for Americas, including commission management and NYSE specialists. Jon Werts will manage the firm’s broker-dealer execution services, futures and Instaquote, a direct market access application from Bank of America. Werts will also report to Sylvan Chackman, co-head of global markets financing and futures.

Chi-X Europe CEO to step down

Peter Randall has decided to step down as CEO of pan-European multilateral trading facility (MTF) Chi-X Europe for personal reasons. The company plans to announce a successor in the next few weeks, although it is unclear whether the company is searching internally or externally for Randall’s replacement.

TheTRADEnews.com understands that Randall, who has been involved in Chi-X Europe from its inception in 2005 and played an instrumental role in building and promoting the platform, now wants to take a step back to spend more time with his family. Discussions have taken place with the intention of Randall continuing to support the MTF, most likely in an advisory role.

Pipeline launches buy-side block trading system

Pipeline Trading Systems, a US block trading venue, has unveiled PowerPlay, an equities block-trading execution system for buy-side traders who want to execute large orders in volatile and fragmented markets.

PowerPlay gives traders access to a combination of proprietary technologies, which allow them to control simultaneous execution of multiple large orders from a single window.

According to Pipeline, PowerPlay will allow traders to minimise information leakage that results from small, probing executions. The platform will use Pipeline’s new Contra Targeting encryption technology, due to be launched in March, which allows traders to find natural matches to large trades by using information from the order management systems of other buy-side traders on the platform.

Nomura revives Lehman’s Asian trading platform

Japanese investment bank Nomura has launched a new pan-Asian electronic trading platform for equities, integrating the execution capabilities it acquired from its takeover of Lehman Brothers Asia last September. This follows the launch of Nomura's European equities platform, created from the acquisition of Lehman's European division, in January.

The new ModelEx platform, based on Lehman’s algorithmic and direct market access (DMA) suite, will run simultaneously with Experts, Nomura’s existing electronic trading offering, while the pan-Asian capabilities of ModelEx are built out. Experts currently offers DMA in Japan and Hong Kong, and algorithmic trading in Japan, while ModelEx will be connected to equity markets in Japan, Hong Kong, Singapore and Australia.

Job cut fears may stall EC mandate on CCP links

While progress has been slow on achieving interoperability between Europe’s cash equity central counterparties (CCPs), it is unlikely that the European Commission (EC) will step in and mandate links between clearing houses any time soon for fear of causing more job losses across the continent.

Few links have been established between CCPs in the three years since the EC introduced its voluntary Code of Conduct for Clearing and Settlement, designed to stimulate interoperability between post-trade providers in Europe, prompting expectations of a more forceful EC directive if more CCP links were not forged quickly.

However, Phillip Silitschanu, senior analyst at research and consulting firm Aite Group, thinks regulatory intervention is now unlikely until at least 2010 or 2011.

FSA tells NYFIX to modify Euro Millennium

Euro Millennium, the pan-European dark pool for equities trading, has been asked by the UK’s financial regulator to make modifications to its functionality, according to a statement by parent company NYFIX, the US-based trading solutions vendor.

In its annual results statement, issued after trading closed in New York last night, NYFIX said that the Financial Services Authority (FSA) has “proposed an interpretation of a particular provision of MiFID that would require modifications to Euro Millennium's current functionality”.

NYFIX said that the modifications would result in additional development costs and would need to be completed “within a timeframe acceptable to the FSA”. The firm is engaged in discussions with the regulator over the new interpretation of MiFID’s rules to minimise the impact on its European dark pool. The new FSA ruling is part of a review of MiFID’s impact on Europe’s financial markets by European regulators.

Hedge fund slump and regulation could hit US prop shops

While US high-frequency traders enjoyed a bumper year in 2008 and now account for the majority of average daily trading volume in the US, declining hedge funds volumes and regulatory change could threaten future performance, according to Sang Lee, co-founder of research consultancy Aite Group.

A new report from Aite, ‘New world order: the high frequency trading community and its impact on market structure’, found that high-frequency traders accounted for more that 60% of average daily trading volume in the US in 2008 and estimates this will rise to around 70% in 2009. It defined high-frequency traders as: market makers relying on automated trading technology; low-latency agency brokers; statistical arbitrage hedge funds; and high-frequency proprietary trading firms – so called ‘prop shops’.

Prop shops in particular thrived amid the market turmoil of 2008. “All of the prop shops did incredibly well last year, but the hedge fund side has taken a hit and it will be interesting to see what impact that has on the overall market,” Lee told theTRADEnews.com. “Maintaining a certain level of volume in the market is going to be very important. If that volume goes away, it will not be an ideal situation for some of these high-frequency trading firms.”

Friday, February 27, 2009

UK recyclables in demand in China

Chinese demand for recyclable materials has helped to boost prices for UK firms selling materials abroad, MPs have been told.

Research by WRAP (the Waste & Resources Action Programme) revealed that overseas buyers have helped to push prices up by £15 a tonne for cardboard, by £10 a tonne for mixed papers and by £5 per tonne for steel.

Marcus Gover, WRAP's director of market development told the Association Parliamentary Sustainable Resource Group the figures showed markets for recyclables are stabilising.

Recycling prices had slumped as a result of the economic downturn.

16th EUROPEAN CONFERENCE ON TYRE RECYCLING

Valorization and management of post consumer tyres: confirmed the "16th EUROPEAN CONFERENCE ON TYRE RECYCLING" by ETRA (European Tyre Recycling Association) - Brussels, 25 - 27 March 2009

The “Economics of a Recycling Society”. ETRA confirm its annual discussion about the growing importance of waste recycling materials, first of all tyre recycling materials, and their use to replace virgin resources. Studies and researches on tyre recycling materials and their employment on road sector and civil enginery, rubberised bitumen and asphalt, buildings and concrete, thermoplastics, thermal and acoustic insulation. Furthermore Exhibitions of tyre recycling products, such as rubber kerbs and rubber tiles for urban furniture or sport facilities, rubber flooring and artificial turf. A Poster Show about innovations in tyre recycling products and materials by industry, universities and technical centres, a Technology Forum and a Pyrolysis Forum and round tables on technology and new employments of recycling tyres.
For further information, Conference registration and to download the program www.etra-eu.org

Integrated waste management systems & PPPs in Greece

Solid waste management is considered to be a multi-dimensional issue due to the variety of factors involved. Such factors indicatively include technology issues in respect to environmental performance and output, issues of strategic and political policy and planning, public awareness and social maturity questions, as well as issues of financial viability.

The Greek legislative framework distributes the administrative jurisdiction among central government and local administrations, depending on the form, size and importance of each relevant project. Despite the already set legislation according to EU standards and directives, the realisation of projects has been evolving at a very slow pace, depictive of state bureaucracy and lack of implementation mechanisms. A permanent unauthorised but realised practice is the uncontrolled solid waste burial, especially common in rural and smaller urban areas. The well intentioned government planning, in the frame of implementing the legislative framework, has been facing issues of funding, slow processes and public approval and awareness, having as a consequence either incomplete projects or court procedures.

Brokers may not smart route to LSE’s hidden order types

Sell-side institutions that direct client flow via smart order routers are unlikely to use the London Stock Exchange’s (LSE) proposed hidden or dark order types because of the restrictions imposed by MiFID’s large in scale (LIS) rules.

The LSE will introduce hidden limit order types on its SETS electronic order book on 16 March. This will allow traders to interact with displayed and non-displayed liquidity on the LSE without displaying price or volume to other participants. The initiative is seen as particularly useful to market participants looking to execute large block trades with minimal market impact.

But to forego MIFID’s pre-trade transparency requirements – and therefore preserve the anonymity of dark functionality – the LSE has to comply with LIS restrictions. (Unlike dark pools, the LSE cannot use the alternative price reference waiver available under MiFID because it is a primary exchange.) LIS rules only permit hidden or dark orders if they are above minimum order sizes, based on the average daily turnover and market capitalisation of a stock, as defined by the Committee of European Securities Regulators.
This means that dark orders sent to multiple venues could fall below size levels required by regulators, if sliced too thinly.

Chi-X Europe CEO to step down

Peter Randall has decided to step down as CEO of pan-European multilateral trading facility (MTF) Chi-X Europe for personal reasons. The company plans to announce a successor in the next few weeks, although it is unclear whether the company is searching internally or externally for Randall’s replacement.

TheTRADEnews.com understands that Randall, who has been involved in Chi-X Europe from its inception in 2005 and played an instrumental role in building and promoting the platform, now wants to take a step back to spend more time with his family. Discussions have taken place with the intention of Randall continuing to support the MTF, most likely in an advisory role.

Chi-X Europe, which was announced in April 2006 and started trading a year later, was the first displayed-order-book MTF to launch in Europe. Randall was named CEO following the launch, having previously held a senior role in the Asian division of agency broker Instinet, Chi-X’s parent firm, now owned by Japanese investment bank Nomura.

BofA names execution team following Merrill takeover

Bank of America, an investment bank, has named the executives that will run the combined execution team created by the merger with global broker-dealer Merrill Lynch, which it bought last September.

Roger Anerella, head of global execution services, will lead the team. Ashok Krishnan retains responsibility for EMEA execution services and Michael Lynch will lead execution services for Americas, including commission management and NYSE specialists. Jon Werts will manage the firm’s broker-dealer execution services, futures and Instaquote, a direct market access application from Bank of America. Werts will also report to Sylvan Chackman, co-head of global markets financing and futures.

Thursday, February 26, 2009

France’s eurozone CCP plan signals protectionism

Reported plans for a single eurozone clearing house for securities trades by a working group led by the Banque de France could counter attempts to unify Europe’s post-trade environment and reflects growing protectionism in the region.

One of the working group’s proposals, according to news reports, is to split up UK/French central counterparty (CCP) group LCH.Clearnet and merge the French part with Eurex Clearing, the post-trade division of European derivatives exchange Eurex, a joint venture between Germany’s Deutsche Börse and Switzerland’s SIX Swiss Exchange.

This would create a dedicated CCP for euro-denominated transactions, with non-eurozone countries, such as the UK, Switzerland and much of northern Europe, using a range of alternative providers. Some believe the plans are designed to prevent the domination of European clearing by either the UK or the US. In October, US post-trade provider DTCC made a EUR 739 million offer for LCH.Clearnet, and in February, a UK inter-dealer broker, ICAP, admitted its participation in a rival consortium of brokers.

“We expect to see a level of consolidation in pan-European equities clearing but I would hope that it would be based on competition and result in the emergence of the strongest, best capitalised CCPs that can best service the constituents in the industry,” Miranda Mizen, senior consultant at research and advisory firm TABB Group, told theTRADEnews.com. “Divisions within Europe would go against the spirit of MiFID and may not necessarily produce the best long-term benefits.”

Phillip Silitschanu, senior analyst at fellow research firm Aite Group, has detected growing protectionism among European countries, which is in turn affecting efforts to forge more CCP links. The European Commission introduced a Code of Conduct for Clearing and Settlement in 2006 in a bid to encourage post-trade interoperability, but progress has been limited. A memorandum of understanding announced earlier this month by Swiss clearer SIX x-clear and EMCF, which clears for three European multilateral trading facilities, is a rare example of collaboration.

“Opening the borders to interoperability in clearing have moved very slowly and there are a lot of hindrances, but it was moving in the right direction,” said Silitschanu. “In the last month or two, I would say the feeling has almost gone the opposite way. All of a sudden, people aren’t concerned about interoperability, they are more concerned about keeping their part of the clearing business inside their borders or at least their continent.”

One CCP not enough for Europe – x-clear CEO

Competition among Europe’s central counterparties (CCPs) can offer greater benefits to market participants than the US’s largely single-clearer model, according to Marco Strimer, CEO of Swiss clearing house SIX x-clear.

“I don’t believe we will have one clearing house for Europe,” he told an industry audience on Tuesday. “I don’t believe one clearing house is good for the markets – you have got to give clients some choice.”

Aside from stimulating price competition and lowering costs for members, Strimer said choice was also important for collateral management, pooling and the ability to clear different instruments.

Strimer’s comments come follow reports of a Banque de France-led working group to create a single clearing house for the eurozone. The proposals include a suggestion to merge the French unit of LCH.Clearnet with Eurex Clearing, the post-trade division of derivatives exchange Eurex.

While Strimer does not foresee a single European clearing house, he does expect a contraction . The current list of European CCPs includes LCH.Clearnet (SA and Ltd), SIX x-clear, Eurex Clearing, EuroCCP, EMCF, CC&G and MEFF.

ConvergEx aims to streamline buy-side commission flow

BNY ConvergEx, a US-based agency brokerage, has upgraded its commission management platform to improve ease of use by buy-side firms.

The enhancement includes a newly designed version of BNY ConvergEx’s InterComm client portal and processing utility for managing trades, commissions and payments. InterComm was initially designed to eliminate the paper flow and attendant processing delays associated with the administration of third-party broker relationships.

A major improvement to the system is the ability to direct commission payments to firms with a ‘click-to-pay’ feature, which will allow clients to self-manage payments via a drop down menu.

Clients will also be afforded access to real-time commission and payment balances, and account statements.

ConvergEx aims to streamline buy-side commission flow

BNY ConvergEx, a US-based agency brokerage, has upgraded its commission management platform to improve ease of use by buy-side firms.

The enhancement includes a newly designed version of BNY ConvergEx’s InterComm client portal and processing utility for managing trades, commissions and payments. InterComm was initially designed to eliminate the paper flow and attendant processing delays associated with the administration of third-party broker relationships.

A major improvement to the system is the ability to direct commission payments to firms with a ‘click-to-pay’ feature, which will allow clients to self-manage payments via a drop down menu.

Clients will also be afforded access to real-time commission and payment balances, and account statements.

“The new features will streamline and simplify payments,” John Meserve, executive managing director and head of BNY ConvergEx Group’s commission management business, told theTRADEnews.com.

Buy-side calls for access to more trading venues – Fidessa

Fidessa LatentZero, a front-office software provider, has credited the 60% increase in users of its EMS Workstation execution management system in 2008 to the buy-side’s growing need to connect to more trading venues, particularly across Europe.

“There has definitely been a group of clients that are looking to take on more broker services to cope with the growing number of markets they need to access,” Russell Thornton, EMS product manager, Fidessa LatentZero, told theTRADEnews.com. “The focus on trying to get out to different venues and making sure your orders are treated in the right way has become more important.”

Fidessa’s EMS Workstation is an internet-deployed, broker-neutral low-latency trading platform for equities and equity derivatives. It offers access to over 115 execution venues and 360 brokers globally and offers integrated access to algorithms from over 40 brokers. The increase in 2008 takes the total number of EMS Workstation clients to around 190.

This year, Fidessa plans to increase program trading functionality and add all US options data to widen its EMS client base.

US buy-side options use to surge as acceptance grows – TABB

US buy-side traders expect their use of options to grow in 2009 as trading conditions return to normal, according to a new study from research and consulting firm TABB Group.

Of the 54 traders at asset management firms, hedge funds market makers and prop trading firms TABB interviewed for the study, ‘US Options Trading in 2009: Resilience in the Face of Crisis’, 63% expected their options volumes to increase in 2009. A further 9% thought volumes would remain flat and 19% said volumes would decline. The remaining 9% provided no answer.

According to Andy Nybo, senior analyst at TABB and author of the report, many options strategies were either not possible or economically viable during the highly volatile trading conditions of Q3-Q4 last year. But traders will be ready to resume and increase options use as trading returns to normal.

“Options strategies allow buy-side traders to hedge and increase their returns through prudent strategies,” he told theTRADEnews.com.

Buy-side calls for access to more trading venues – Fidessa

Fidessa LatentZero, a front-office software provider, has credited the 60% increase in users of its EMS Workstation execution management system in 2008 to the buy-side’s growing need to connect to more trading venues, particularly across Europe.

“There has definitely been a group of clients that are looking to take on more broker services to cope with the growing number of markets they need to access,” Russell Thornton, EMS product manager, Fidessa LatentZero, told theTRADEnews.com. “The focus on trying to get out to different venues and making sure your orders are treated in the right way has become more important.”

Fidessa’s EMS Workstation is an internet-deployed, broker-neutral low-latency trading platform for equities and equity derivatives. It offers access to over 115 execution venues and 360 brokers globally and offers integrated access to algorithms from over 40 brokers. The increase in 2008 takes the total number of EMS Workstation clients to around 190.

This year, Fidessa plans to increase program trading functionality and add all US options data to widen its EMS client base.

Instinet to launch new US dark pool within two months

Instinet, a global agency broker, is scheduled to release a new dark pool in the US within the next two months.

BLX is expected to be a block-only venue which will complement CBX, Instinet’s existing US dark pool. CBX passively exposes orders to Instinet’s US order flow and allows access to its liquidity via algorithms.

In addition to CBX in the US, Instinet also operates JapanCross, KoreaCross and CBX in Asia, as well as BlockMatch, a European non-displayed venue, which does not allow flow from investment banks’ proprietary trading desks and lets clients decide whether or not to display their intentions.

CBX in the US and Asia, as well as BlockMatch in Europe, all provide reciprocal access to Credit Suisse’s Crossfinder dark pool.

Roughly 7-8% of total US equity flow was executed in the dark during 2008, primarily shared between the 18 most active non-displayed venues. Instinet is a wholly-owned subsidiary of Nomura Holdings, a Japanese-based investment bank.

StreamBase integrates Interactive Data's PlusFeed

StreamBase Systems, a complex event processing (CEP) software provider, is to include low latency data in its systems from Interactive Data's real-time services business.

StreamBase’s market data management, smart order routing and real-time profit and loss frameworks allow customers to access market data delivered by PlusFeed, Interactive Data’s consolidated low-latency digital datafeed that powers algorithmic and electronic trading applications. PlusFeed delivers low-latency data on over six million securities from more than 450 sources around the world.

Interactive Data and StreamBase have created a series of extensions that allow customers to connect to content delivered by PlusFeed. The resulting solution supplies real-time market data, time-sensitive pricing and reference data for millions of financial instruments across multiple asset classes worldwide, allowing simple and effective development of market data management applications.

Jay Kilberg, managing director, Interactive Data real-time services, said: “Our relationship with StreamBase facilitates the delivery of our low latency data to a wider range of customers such as sell-side firms and hedge funds.”

Brokers may not smart route to LSE’s hidden order types

Sell-side institutions that direct client flow via smart order routers are unlikely to use the London Stock Exchange’s (LSE) proposed hidden or dark order types because of the restrictions imposed by MiFID’s large in scale (LIS) rules.

The LSE will introduce hidden limit order types on its SETS electronic order book on 16 March. This will allow traders to interact with displayed and non-displayed liquidity on the LSE without displaying price or volume to other participants. The initiative is seen as particularly useful to market participants looking to execute large block trades with minimal market impact.

But to forego MIFID’s pre-trade transparency requirements – and therefore preserve the anonymity of dark functionality – the LSE has to comply with LIS restrictions. (Unlike dark pools, the LSE cannot use the alternative price reference waiver available under MiFID because it is a primary exchange.) LIS rules only permit hidden or dark orders if they are above minimum order sizes, based on the average daily turnover and market capitalisation of a stock, as defined by the Committee of European Securities Regulators.
This means that dark orders sent to multiple venues could fall below size levels required by regulators, if sliced too thinly.

BofA names execution team following Merrill takeover

Bank of America, an investment bank, has named the executives that will run the combined execution team created by the merger with global broker-dealer Merrill Lynch, which it bought last September.

Roger Anerella, head of global execution services, will lead the team. Ashok Krishnan retains responsibility for EMEA execution services and Michael Lynch will lead execution services for Americas, including commission management and NYSE specialists. Jon Werts will manage the firm’s broker-dealer execution services, futures and Instaquote, a direct market access application from Bank of America. Werts will also report to Sylvan Chackman, co-head of global markets financing and futures.

In Asia, Mark Wheatley will be responsible for Pacific-Rim execution services and will report to Yasuhiro Fujiwara, head of Asia-Pacific equities.

Chi-X Europe CEO to step down

Peter Randall has decided to step down as CEO of pan-European multilateral trading facility (MTF) Chi-X Europe for personal reasons. The company plans to announce a successor in the next few weeks, although it is unclear whether the company is searching internally or externally for Randall’s replacement.

TheTRADEnews.com understands that Randall, who has been involved in Chi-X Europe from its inception in 2005 and played an instrumental role in building and promoting the platform, now wants to take a step back to spend more time with his family. Discussions have taken place with the intention of Randall continuing to support the MTF, most likely in an advisory role.

Chi-X Europe, which was announced in April 2006 and started trading a year later, was the first displayed-order-book MTF to launch in Europe. Randall was named CEO following the launch, having previously held a senior role in the Asian division of agency broker Instinet, Chi-X’s parent firm, now owned by Japanese investment bank Nomura.

Since launch, Chi-X has built up a pan-European market share of 5% by value and 4% by share volume, according to data provider Thomson Reuters’ monthly market share statistics for January 2009. As such, it is so far the most successful platform of its peer group, which includes Turquoise, BATS Europe and Nasdaq OMX Europe. By comparison Turquoise, the second most successful of the group, had a value market share of 2.8% and a volume market share of 2% in January, according to Reuters. Turquoise started trading in August 2008.

Nomura revives Lehman’s Asian trading platform

Japanese investment bank Nomura has launched a new pan-Asian electronic trading platform for equities, integrating the execution capabilities it acquired from its takeover of Lehman Brothers Asia last September. This follows the launch of Nomura's European equities platform, created from the acquisition of Lehman's European division, in January.

The new ModelEx platform, based on Lehman’s algorithmic and direct market access (DMA) suite, will run simultaneously with Experts, Nomura’s existing electronic trading offering, while the pan-Asian capabilities of ModelEx are built out. Experts currently offers DMA in Japan and Hong Kong, and algorithmic trading in Japan, while ModelEx will be connected to equity markets in Japan, Hong Kong, Singapore and Australia.

When the integration is complete, Nomura clients will be able to benefit from the combination of Lehman’s Asian quantitative analytics team, algorithmic developers, information technology and operations personnel, and Nomura’s client relationships and analytics in Japan.

Job cut fears may stall EC mandate on CCP links

While progress has been slow on achieving interoperability between Europe’s cash equity central counterparties (CCPs), it is unlikely that the European Commission (EC) will step in and mandate links between clearing houses any time soon for fear of causing more job losses across the continent.

Few links have been established between CCPs in the three years since the EC introduced its voluntary Code of Conduct for Clearing and Settlement, designed to stimulate interoperability between post-trade providers in Europe, prompting expectations of a more forceful EC directive if more CCP links were not forged quickly.

However, Phillip Silitschanu, senior analyst at research and consulting firm Aite Group, thinks regulatory intervention is now unlikely until at least 2010 or 2011.

“Regulators know if they hand down a mandate that says ‘By 200X you must have interoperability’ that is going to translate into more efficiency, lower costs and more job cuts, because you don’t need 1,000 people in the back office clearing trades in every single country,” Silitschanu told theTRADEnews.com. “You would have thousands of people in the business being laid off and every 1,000 votes counts. I don’t think Brussels wants that blood on its hands.”

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