Transatlantic exchange operator Nyse Euronext is teaming with investment banks HSBC and BNP Paribas to establish an electronic block trading platform for European listed stocks, dubbed Project SmartPool.
The new platform, which is expected to go live in Q2 2008, will be accessible to all European sell-side firms.
Project SmartPool is specifically designed to meet the trading needs of large institutional order flow, and will complement the limit order book offered by Nyse Euronext in Europe already.
In a statement, Nyse Euronext says the introduction of the EU's Markets in Financial Instruments Directive (MiFID) in November "creates an exciting business opportunity" for new alternative trading systems.
The new system will enable users to interact anonymously, without disclosing the size or price at which they are willing to trade. This meets financial institutions' need for minimal information leakage and market impact within the standards set by MiFID, says the exchange.
All transactions executed through SmartPool will be published post-trade in compliance with MiFID's requirements, and cleared and settled using a global system to be offered by an external party.
Commenting on the venture, Roland Bellegarde, head of European cash markets and member of the Nyse Euronext management committee, says: "With the formation of the Project SmartPool, Nyse Euronext is the first exchange in Europe to announce an electronic block trading market, building a strong alliance between our own experience as the leading European market-place and our partnering banks' expertise in large order execution. We would welcome further banks who are interested in participating with us in this exciting new project."