A group of the largest banks and brokers in Sweden are teaming up to launch an alternative trading facility - called Burgundy - that will provide trading in Nordic equities and compete directly with Nasdaq OMX and other exchanges.
The new multilateral trading facility (MTF) is being established by Swedish banking groups Swedbank, Handelsbanken and SEB, along with brokers Neonet, Carnegie, Nordnet, Kaupthing, Ohman, Avanza and Evli.
The service - which is expected to launch in the first half of 2009 - will provide trading in equities listed in Stockholm, Oslo and Copenhagen. The group says the new platform will ensure high liquidity, low transactional costs and best execution.
Burgundy is one of a number of up-starts launching in the European market following the implementation last year of the European Union's Markets in Financial Instruments Directive (MiFID).
Burgundy spokesman Tom Dinkelspiel told reporters at a press conference that the banks backing Burgundy executed around 45% of all trading on the Stockholm Stock Exchange in May and about 30% of total Nordic trades.
He declined to provide a market share forecast, but pointed to Chi-X Europe's growing market share is an example of what to expect from the new Burgundy platform. He said Chi-X Europe had taken market share from the London Stock Exchange (LSE) of 10%-15% in a short time, without being backed by banks operating in the market.