Bob Fuller, previously director of IT strategy at Dresdner Kleinwort Wasserstein and co-head of the MiFID Joint Working Group, is to spearhead a new MiFID-ready Pan-European trading platform using technology that was mothballed with the closure of the Easdaq growth market.
The new organisation, dubbed Equiduct, will launch in Q2 2007, using an upgraded version of the Easdaq exchange technology platform that was used in production by Nasdaq Deutschland and Nasdaq Europe and subsequently licensed to Nasdaq US.
Equiduct's backers says the service will offer the first MiFID-compliant, integrated Europe-wide single connection for trading services and execution. Financial institutions will be able to conduct transactions via the company's own pan-European regulated exchange or license the technology for internal use.
The Equiduct platform will feature pre- and post-trade transparency, a hybrid book, a quoting facility and a best execution capability for equities. The system promises guranteed execution at a proveable best price and with a 10 millisecond turnaround time.
Equiduct’s core IT operations team will be based in London, while its regulatory home will be in Belgium along with its corporate functions and market supervision staff.
Equiduct’s CEO Bob Fuller, comments: "With our Equiduct services we can facilitate MiFID compliance by providing a single point of connectivity, and allow organisations to play in the post-MiFID markets without having to make the large investments they would have had to bear individually in order to stay competitive."
The service is being targetted at banks - both individually or in consortia - and at smaller exchanges that lack the capital to develop fully compliant products in an increasingly low margin business environment.
The initiative has been welcomed by key market participants. Richard Balarkas, co-chair of the global steering committee for the FIX Protocol, and managing director, head of equity trading services at Credit Suisse, says: "MiFID is likely to result in liquidity fragmentation as happened in the USA. Therefore, to insulate the market against the cost of multiple links by building a hub facility with access to all the pools is good."
News of the move comes a week after a Euronext spokesman confirmed reports that the exchange is in talks with investment banks about establishing an internal matching system. Agency brokerage Instinet also went public in early October with plans to launch a new automated trading system for European equities dubbed Chi-X.