11.02.2017

Block Trading Venues Set Records

11.02.2017
Shanny Basar

Turquoise Plato Block Discovery and Cboe LIS both had a record monthly value traded in October as block trading is due to become more important under new European Union regulations.

MiFID II, the regulation covering EU financial markets from January 2018, will change trading by introducing double volume caps on dark pool trading and not allowing brokers to cross internal flows without registering as a systematic internalizer. However Large In Scale (LIS) trades, above a certain size specified by the European Securities and Markets Authority, are exempt from the dark pool volume caps. As a result there will be more large trades to take advantage of the waiver.

Last month €7.55bn ($8.8bn) was traded via Turquoise Plato Block Discovery, 25% more than the prior record value set in September this year and more than four times the value in October 2016.  There was also a daily record of €457.7m on 25 October, 5% higher than the previous record on 27 July 2017.

In September last year Plato Partnership announced its formal creation as a not-for-profit industry group representing asset managers and broker dealers with the aim of improving market structure, and achieving better results for the end-investor, in Europe. At the same time, Plato also announced its first partnership by entering into an agreement with Turquoise, the London Stock Exchange Group’s pan-European multilateral trading facility – the first between the buyside, sellside and a trading venue.

Last month the platform celebrated the third anniversary of the launch of Turquoise Plato Block Discovery. More than €43bn was traded in the three years, of which 91% has been since the signing of the agreement with Plato Partnership last year.

Paul Squires, AXA IM

Paul Squires, global head of trading and securities financing at AXA Investment Managers and a Plato Partnership Member, said in a statement: “Ensuring we get ahead of the curve to provide the market with solutions that will drive genuine utility is absolutely central to Plato Partnership’s values, and the third anniversary of Turquoise Plato Block Discovery has demonstrated this success.”

In September Turquoise also announced plans to launch Lit Auctions ahead of MiFID II implementation. Turquoise Lit Auctions are triggered when Turquoise receives matching orders from its members. Members will then have a 50 millisecond window in which to submit any further orders to the auction before a further 50 millisecond randomised uncrossing period commences.

Yesterday Cboe Europe Equities, formerly known as Bats Europe, said in a statement it had successfully rolled out its final MiFID II exchange software release. The enhancements included additional trade-flagging capabilities and the ability for third-country firms to supply transaction reporting information to Cboe.

Cboe LIS and Cboe Periodic Auctions book, two products designed to meet MiFID II regulatory changes, both reported record volume last month. Cboe LIS reported average daily value traded of €139.2m, a nearly 25% increase over its prior record month in September.

David Howson, chief operating officer of Cboe Europe, said in a statement: “With the broker crossing networks shutting down and the double volume caps coming into force under MiFID II, Cboe LIS and the Cboe Periodic Auctions book offer market participants a place to conduct their trading activity with minimal market impact.”

In February this year asset managers were given  direct access to Cboe LIS, instead of having to connect though a broker.

Related articles

  1. Deutsche Borse-LSE Merger in Focus

    Archax is the UK’s first regulated digital securities exchange.

  2. Investors can take into account firms' impact on nature in addition to traditional ESG metrics,

  3. The fund manager recently announced connectivity between Coinbase and the Aladdin platform.

  4. New Emir Reporting Requirements Kick In

    MFA says proposal will impair managers' ability to deliver for investors.

  5. Jacobi Asset Management has hired an ex-BlackRock executive as its new CEO.