23 February 2018
visit www.ebaday.com

European stock exchanges facing 'perfect storm'

30 January 2008  |  5238 views  |  0 Finexpo crowds

Lee Hogkinson, CEO of virt-x says Europe's incumbent exchanges are about to enter a 'perfect storm' of new competition driven by powerful forces of deregulation and tremendous advances in the speed and intelligence of trading technology.

Speaking to a crowded room of 200+ delegates at Finexpo, Finextra's annual capital markets conference and exhibition in London, Hodgkinson expressed the view that the European markets are "at the start of a fundamental and long-lasting change of a magnitude never before seen in our industry".

The beginning of this process can already be seen by the imminent arrival of a host of new competitors, such as Instinet Chi-X, Turquoise and Nyfix, the diminishing dependence of the buy-side on the sell-side for order execution, and the gradual seeping of transparent order flow into dark pools of liquidity.

The introduction of MiFID combined with advances in smart order routing technology have buried forever the notion that long-standing incumbents have "any divine right to liquidity" Hogkinson notes. To compete in the emerging landscape, exchange execution venues will have to offer better value for money, he says, and strive for constant innovation by utilising technology that is big, fast and cheap.

Virt-x itself has already embarked on a three year infrastructure upgrade programme intended to cater for increased demand for direct market access (DMA) and algorithmic trading. The exchange is tapping outside suppliers for the rebuild and is also working with third party newcomers such as Nyfix to provide a dark pool platform for block trading of Swiss blue chips. "We have to accept that not all transactions are suited to the public limit order book," he says.

The importance of smart order routing technology in tapping liquidity in a fragmenting market was emphasised by George Andreadis, head of AES liquidity strategy for Europe with Credit Suisse. The broker is currently using dynamic order placement alongside intelligent liquidity sourcing to generate significantly improved returns for its clients, he states. By switching trades across execution venues, Credit Suisse is seeing average improved margins of two basis points rising to a maximum nine basis points.

"Clients can get real basis point improvements when trading away from the main exchange," he says. "That's why the new exchanges can't be ignored."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Turquoise chief Lederman to keynote at Finexpo

Turquoise chief Lederman to keynote at Finexpo

11 January 2008  |  8365 views  |  0 comments
Virt-x and Nyfix to launch block trading service for Swiss blue-chips

Virt-x and Nyfix to launch block trading service for Swiss blue-chips

04 December 2007  |  6627 views  |  0 comments
SWX re-vamps infrastructure for algo trading

SWX re-vamps infrastructure for algo trading

05 July 2007  |  4942 views  |  0 comments

Related company news

 

Related company information

Credit Suisse

Related blogs

Create a blog about this story (membership required)
Register for the webinarvisit www.nextgenbanking.co.ukvisit www.capgemini.com/worldreports

Top topics

Most viewed Most shared
Ripple makes new connections to emerging marketsRipple makes new connections to emerging m...
10915 views comments | 14 tweets | 10 linkedin
hands typing furiouslySome Interesting Applications Of The Inter...
10059 views 3 | 9 tweets | 1 linkedin
Basel Committee outlines disruptive fintech scenariosBasel Committee outlines disruptive fintec...
7838 views comments | 15 tweets | 26 linkedin
Investment Association sets up fintech accelerator for asset managersInvestment Association sets up fintech acc...
7541 views comments | 19 tweets | 10 linkedin
R3 creates Legal Centre of Excellence for blockchain technolgyR3 creates Legal Centre of Excellence for...
7288 views comments | 10 tweets | 14 linkedin

Featured job

Six-Figure-Base, Double OTE, Benefits Package
London, UK

Find your next job