Spain’s BME Eyes Liquidity With Co-Location Push
Bolsas y Mercados Españoles (BME) continues to facilitate quicker and easier access to its venue as the Spanish exchange looks to attract more liquidity from London-based traders.
With the eurozone crisis subduing volumes on European exchanges in general and the recent push by pan-European multilateral trading facilities Bats Chi-X Europe and Turquoise to crack the previous monopoly the BME held in Spain, the Madrid-based venue has come out fighting in recent months with a raft of new technological initiatives to increase revenues.
The BME’s latest move has been to link up with Interxion, a data center operator, to offer access to the BME’s Madrid-based co-location service from Interxion’s City of London campus. The service, which will go live from November 1, will reduce latency between London and Madrid to 13.8 milliseconds and offer access to the Spanish cash and derivatives markets as well as offering information supplied by BME Market Data via the same infrastructure in real time with significantly reduced latency.
Following expansion of its communication infrastructure and IT systems at its Madrid data center, the BME will, from November, allow members to place their automated trading systems just a few meters away from the BME’s cash and derivatives trading engine. The new co-location service will supplement the BME’s existing proximity hosting offering, which was first launched in 2009.
“More than 65% of flow coming into the Spanish market is from non-resident investors,” José Parga, managing director of BME Visual Trader, its IT subsidiary, told Markets Media.
“We want ways to promote connectivity. Anything we can do to attract liquidity and make it easier for connectivity, we will do.
“We have been offering a proximity service for three years. But we are going to be offering co-location too. Most of the entities in co-location are non-residents, firms coming from London. We are opening the new service through these lines from London to Madrid.
“In terms of technology, we want to make the BME on a par with other leading exchanges in Europe.”
In April, the BME, which still holds just over 95% of the market share in Spain with Bats Chi-X Europe hovering around the 4% mark despite a big attempt to gain further traction into the Spanish market earlier this year through price promotions, also upgraded its trading system in a bid to attract more high-frequency traders to the venue. Its rivals, such as Bats, have used super-fast systems for some time.
But the Spanish exchange is using the threat of competition to drive itself on and sees the new service with Interxion allowing it greater connectivity to the main European trading center of London.
“The new service offered in collaboration with Interxion will greatly facilitate remote access to brokers’ systems and therefore to the SIBE and MEFF platforms, guaranteeing the reliability and security of the Spanish stock exchange systems,” said Jorge Yzaguirre, director of equities at BME. “This is yet another step forward in offering the Spanish market the best available access technology infrastructure.”
Greg McCulloch, managing director of Interxion UK, added: “BME is a valuable addition to our financial hub in London, and it’s great that our customers can now benefit from this cost-effective connectivity to the Spanish markets.”
The Nordic and Baltic exchanges had record IPOs and trading volumes.
It is important to maintain the voluntary nature of the standard.
Proposed changes would lead to an unsustainable level of additional cost and liability for issuers.
The regulator seeks input on the use of DLT for trading, settlement and regulatory reporting.
The strategic move taps into the existing geographic infrastructure within TP ICAP.