New Hungarian MTF will have liquidity “from day one”

This summer will see the launch of yet another pan-European multilateral trading facility, Quote MTF, a Hungarian-based platform that will offer liquidity from third-party market-makers from launch.

Quote MTF is 60% majority-owned by BRMS Holdings, which already owns stakes in Canadian alternative trading venues SwiftTrade and Omega ATS. The firm is building its own proprietary trading system from scratch and has already agreed a deal with a central counterparty, which it expects to announce within a few weeks. Quote MTF’s projected Q2 launch could take the number of pan-European blue-chip MTFs to six, pending the launch of NYSE Arca Europe by exchange group NYSE Euronext, due to start trading in Q1 2009.

“We think we will have a number of factors that will differentiate us from the rest of market,” Gabor Kutas, member of the board, Quote MTF, told theTRADEnews.com. “We will have a different pricing model to the others, which we will elaborate on in due course, and will be among the most aggressive for paying liquidity sponsors, who will be making markets from day one. Additionally, there are no banks or incumbent exchanges with stakes in the platform, so there will be no political issues.”

Burgundy chooses EMCF, plans multi-clearer model

Burgundy, a multilateral trading facility for Nordic securities, has chosen European Multilateral Clearing Facility (EMCF) as its central counterparty (CCP), and is looking to add other clearers as the platform develops. Burgundy aims to start trading in Q2 this year and introduce full CCP clearing in October. Before then, participants will clear trades on the platform bilaterally.

“We have decided to open up to competitive clearing,” Olof Neiglick, CEO of Burgundy, told theTRADEnews.com. “Once the project matures, we will add more CCPs. Two additional clearing providers will be available in the Nordic market by the end of the year.”

Burgundy chose EMCF as its initial clearing provider based on the preferences of the banks and securities firms in the consortium that founded the platform. “A number of the banks are already members, so it had a first-mover advantage,” said Neiglick.

Burgundy’s shareholders are Avanza Bank, Danske Bank, D. Carnegie & Co, DnB NOR, Evli Bank, HQ Bank, Kaupthing Bank (Sweden), NeoNet, Nordea, Nordnet, SEB, Svenska Handelsbanken, Swedbank and Öhman.

Burgundy trades will be fully fungible with those conducted on other trading platforms connected to EMCF. “You will be able to buy a position on one platform and sell it on Burgundy, for example. That is extremely important for efficiency,” said Neiglick. “There is full netting and cross-clearing between all platforms connected to EMCF.”

FXall adds netting service to trading platform

Electronic foreign exchange trading platform FXall has launched Cross Currency Netting, a new feature enabling users to manage high-value multi-currency exposures in volatile markets. The new feature is part of the company’s commitment to improve its platform, which is used by institutional clients such as asset managers, corporate treasurers, hedge funds and banks.

Cross Currency Netting combines tools which help clients identify principal risks within a currency portfolio so they can be transferred to their chosen bank or custodian. The details are automatically processed by FXall’s integrated workflow and straight-through processing capabilities.

The new feature enables customers to consult their bank or custodian about the optimal trading strategy in a fully automated way and with a complete audit trail. FXall said this allows clients to operate more efficiently, use the expertise of their partners, and maintain a controlled, error-free environment.

CCP deal brings European clearing competition closer

Europe’s biggest brokers welcomed last week’s announcements on interoperability between central counterparties (CCP) but admit it is only the first step towards an efficient clearing model for the pan-European market.

EMCF, which acts as the CCP for multilateral trading facilities (MTF) Chi-X, Nasdaq OMX Europe and BATS Europe, entered into a deal last week with Swiss clearer SIX x-clear to interoperate for those venues that choose to implement it.

So far, all MTFs that use EMCF have announced their intentions to add SIX x-clear as an alternative clearer. Turquoise, a broker-backed MTF, also told theTRADEnews.com that it is in discussions with its clearer, EuroCCP, to extend clearing options available to members.

However, the London Stock Exchange (LSE), which added SIX x-clear to LCH.Clearnet, its incumbent clearing house, last December and NYSE Euronext, which uses LCH.Clearnet across its European markets, said they have no plans to add to their current CCP offerings, in light of last week’s announcement. With SIX x-clear and EMCF agreeing interoperability, and SIX x-clear sharing CCP duties at the LSE, the day on which brokers can use a single CCP for accessing multiple major European exchanges and MTFs may have moved one step closer.

CA Cheuvreux offers Saudi trade execution via swap products

French broker CA Chevreux has started offering its institutional investor clients access to firms listed on the Saudi Arabian stock market (Tadawul) through swap products.

Saudi Arabia's capital market, the world’s 11th largest, opening up to international investors in August 2008. “By allowing access to Gulf Cooperation Council’s (GCC) principal capital market, we are satisfying interest from our clients who are looking to invest in the region,” said Ian Peacock, global head of execution services, CA Cheuvreux.

CA Cheuvreux's executing broker on the Saudi Arabian market is Fransi Tadawul, a large local broker and a subsidiary of Banque Saudi Fransi. Under the regulatory guidance of the capital market authority, local authorised entities such as Fransi Tadawul are able to transfer the economic performance of Saudi stocks to non-GCC investors through swap agreements.

LSE average daily value drops 60% in January

The average daily value of equity trades on the London Stock Exchange's (LSE) electronic order books fell 60% to £6.2 billion in January 2009 from the record average daily value reported in January 2008. The average daily number of trades in January 2009 was 881,609 – 30% down on the same period last year.

The average daily value of trades on the LSE’s UK electronic order book in January 2009 was £4.8 billion, a 58% drop from the previous January. Average daily volume was 632,517, compared with 883,793 12 months earlier.

The group’s Italian electronic order book, acquired when it bought Borsa Italiana in 2007, saw its average daily value drop 69% to EUR 1.7 billion (£1.5 billion) in January 2009 from the previous January and average daily volume fall 36% to 211,987.

The average levels of the FTSE 100, the UK’s index of blue-chip stocks, and the Italian MIB index were 29 per cent and 45 per cent higher respectively in January 2008.

US broker hires ex-Credit Suisse exec as head of fixed income trading

US institutional brokerage Concept Capital has hired Allen Oppici, a former Credit Suisse executive, as director of fixed income sales and trading, marking the firm’s entry into the fixed income market.

In his new role, Oppici will oversee the launch and growth of Concept’s fixed income business. He plans to hire several sales personnel for the firm’s trading desk in Q1 this year. Further appointments are expected throughout the year as the fixed income unit expands.

Oppici’s appointment closely follows Concept’s hiring last month of former Citigroup executive Robert E. Moore to head its global institutional trading and research business. Concept is planning to triple the size of its institutional sales and trading team during 2009.

Oppici has more than 20 years’ experience in the securities, including 13 years at Donaldson, Lufkin & Jenrette (DLJ) and subsequently Credit Suisse, where he was director of fixed income trading. Credit Suisse bought DLJ in 2000.