06.06.2014
By Terry Flanagan

MillenniumIT Supports New Canadian Exchange

MillenniumIT, the London Stock Exchange Group’s technology business, has been selected by Aequitas, a new exchange in Canada which is similiar to IEX in the US.

Mack Gill, chief executive of MillenniumIT, told Markets Media: “Aequitas is the equivalent of IEX in Canada so their business model is getting a lot of attention on the new front of market fairness. Working with a group of people with new approaches is a phenomenal place to be as we want to be on the cutting edge of innovation.”

IEX, the U.S. alternative trading system, was set up to reduce the advantages of high-frequency traders and allow long-term buy-side investors to trade large blocks of shares more efficiently.

Jos Schmitt, chief executive of Aequitas Innovations Inc, referred to the Lewis book in a speech at the Economic Club of Canada this week. Schmitt said the book provides an excellent description of the different predatory strategies rolled out in today’s markets and although he did not believe markets are rigged, he thinks they are unfair.

Schmitt said: “Why? Because certain market participants benefitting from a technological advantage and the financial capability to leverage it, deploy strategies which make the playing field uneven and that are harmful to long term investors. There have always been predatory trading strategies. But now it is systemic, amplified by marketplaces that are complicit. The pendulum has swung too far, it has become taxation without representation.”

Karl Ottywill, chief operating officer of Aequitas, said in a statement: “Aequitas conducted a robust RFP process where we measured the ability of technology providers to deliver a series of technology and operational requirements. MillenniumIT rose to the top as the clear leader in its field.”

Gill said MillenniumIT can provide solutions on an integrated platform from front end order routing, matching in equities, market data to post-trade.

“Aequitas wanted an integrated architecture that was industry proven as they bring novel offerings to the market and we had to customise everything from our order routing to analytics,” Gill added.

Aequitas will use products including Millennium Exchange, Millennium SOR and Millennium MarketData. Gill started at MillenniumIT a year ago and he said the strategy for the firm going forward is to continue to work on platform approach, where clients buy a whole suite of products, and to further scale globally.

Gill said: “In our last financial year MillenniumIT grew third party revenues 21% year-on-year and we see lots of further opportunities”

One of the largest opportunities for MillenniumIT is post-trade services and analytics, according to Gill, particularly in Europe when the the initial wave of Target2-Securities will be introduced next year.

T2S aims to end fragmentation in Eurozone securities settlement by providing a single IT platform to settle transactions in central bank money across borders, central security depositories and currencies. CSDs will connect to T2S in four waves between June 2015, when the project goes live, and February 2017.

The service will be offered at the same price for all participating CSDs so there is no difference between domestic and cross-border transactions. So far 24 European CSDs have joined T2S covering 21 European markets, so the project will cover almost all securities currently settled in the euro area, and lead to significantly lower costs.

“Post-trade is one of our most exciting opportunities as MillenniumIT can offer a new paradigm of real-time processing in an integrated approach, added Gill. “We are working with the LSE Group to provide a technology roadmap for T2S which is a very active space and will see a lot of investment over the next five years.”

MillenniumIT technology is now used by more than 40 exchanges, depositories, brokerages and regulatory bodies across the Americas, Europe, Asia and Africa.

Featured image via iStock

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