Warsaw Exchange Participants Prepare For Trading Changes
Brokers and vendors are jockeying for position ahead of the new trading platform that the Warsaw Stock Exchange (WSE) aims to have up and running by November.
After signing a long-term co-operation agreement with transatlantic stock exchange operator NYSE Euronext in 2010, the WSE has been in the process of overhauling its trading infrastructure and wants to encourage new categories of traders such as prop shops, algo traders and high-frequency traders to the emerging market venue in a bid to drive trading, especially in derivatives which the WSE sees as a growth driver.
The Polish bourse, which is MiFID compliant, is now the dominant player in central and eastern Europe, accounting for just over half of all equities traded in the region, and wants to challenge its bigger rivals to the east—the Moscow Exchange in Russia and Turkey’s Istanbul Stock Exchange—by facilitating easier access for foreign investors while also offering a cut-price alternative to the more expensive western European markets.
“Market fragmentation in Europe is driving trading firms to seek new sources of liquidity,” said Philippe Carré, global head of client connectivity at trading technology firm SunGard’s capital markets business in London.
However, local brokers are being forced to keep up with the rapid technological changes that the WSE is undertaking and are having to upgrade their IT systems to cope with the new Universal Trading Platform (UTP)—which is being built by NYSE Technologies, the technology arm of NYSE Euronext—that is expected to go live on November 2. At present, the WSE’s own system is accessible to brokerage houses but, from November 2, it will only be a platform to which brokers will be able to connect. Technology vendors, meanwhile, are eyeing the rich opportunities.
“Being a supplier of financial technology to the Polish market is an important strategy for our company,” said Enrico Dameri, chief executive of List, an Italian-based software provider. “We strongly believe that Poland has one of the most promising markets in terms of development opportunities over the next few years. Migration to the UTP system will accelerate this process and will represent a new challenge for Polish brokerage houses.”
Brokers, though, are worried that they will be the ones bearing the additional costs.
“This is ‘shifting’ costs to brokers,” Stanisław Waczkowski, vice-president at Ipopema Securities, a Polish broker, told Poland’s Parkiet newspaper earlier this month. “We are expecting that this should be accompanied by a change in the stock exchange’s price policy.”
Meanwhile, the WSE has developed a mobile data application for mobile devices running the Apple iOS and Android operating systems that will allow traders to access prices, market data and breaking news from WSE’s main market, its NewConnect alternative trading system and its Catalyst bond market.
Previously, the WSE offered a mobile version of its website where you could access quotations, ratios, communiqués, resolutions and other information on a phone but the Warsaw exchange says the launch of this additional application for users of smartphones and other mobile devices further improves investor access to exchange data.
“There is nothing more important on the exchange market than information,” said Ludwik Sobolewski, chief executive of WSE. “Fast and efficient access to information is a key resource of every capital market participant. As a key capital market institution implementing many innovative initiatives, we want to facilitate access to information through state-of-the-art technology. Hence, the decision to offer the application free of charge. I am certain that it will attract a lot of interest, not only on the part of investors.”
Many international investors are already wise to the attractions on offer at the WSE. Poland has been surprisingly resilient in the face of the global financial crisis and ongoing eurozone troubles and its economy has grown 15.7% between 2008 and 2011. This is compared to a European Union average of -0.5% for the same period.
CEDX opened on 6 September, offering contracts on Cboe Europe single country and pan-European indices.
The MOU covers certain security-based swap dealers and participants.
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The analysis is based on transactions publicly reported by 30 European APAs and venues.
A similar service is available on the BIDS platform in the US equity market.