European stock market Euronext is stepping up the pressure on the London Stock Exchange by temporarily waiving certain fees on Dutch securities and expounding on plans for a trading system for UK shares.
The new incentive scheme for Dutch securities comes as the London Stock Exchange prepares to launch its own Dutch trading facility next week. In a deliberate spoiler, Euronext says it will waive the EUR0.30 strike fee and offer a EUR0.03 credit for every active order executed from Monday 24 May until the end of July.
Euronext chief Jean-François Théodore, comments: "This comes on top of the existing incentives we are already offering, which reduce the cost of trading by up to 30%."
In a separate assault, Euronext says it is consulting the London user community about its plans to launch a trading facility in the most liquid UK shares, including FTSE 100. The discussion with market users has ranged across issues such as functionality, lists of stocks and specific measures to promote liquidity.
The exchange says the initiative is a natural fit with Euronext.liffe's existing UK equity and index derivatives products. London is the only market currently where Euronext does not offer cash and equity derivatives simultaneously. Moreover, one in five of Euronext cash equities screens are currently located in the UK.
Trading will be done through the NSC platform which is used for dealing on the Euronext markets in Amsterdam, Brussels, Lisbon and Paris, with a likely start date in the autumn. Clearing will be through LCH.Clearnet and settlement will be through Crest. It is intended to offer full fungibility of trades within LCH.Clearnet and Crest.
Says Theodore: "The Euronext solution is simple: one connection to one market, and one route to the same clearing and settlement channels that London market users are used to."
Euronext's counter-strike on the LSE comes as the London Exchange reports a six per cent rise in turnover for the year to £205.4 million and two per cent lift in operating profits before deductions of £83.2 million. A special dividend of £162 million has been paid to shareholders as a result of continuing strong cash generation, including an anticipated £67 million windfall from the sale of the Exchange's iconic tower building.
Commenting on the results, Clara Furse, LSE chief executive, states: "Whilst market conditions in Information Services remained challenging, performance in our Broker Services' division was good and our Issuer Services business grew in the second half of the year.
"With our good ongoing cash flow enabling us to continue investment in new initiatives, the Exchange is well positioned for the future."