The London Stock Exchange has partnered with trading technology house Fidessa to build the order management and smart routing technology for Baikal, the LSE's forthcoming pan-European dark pool.
Among other partners - including BNP Paribas Securities Services, QuantHouse and Smarts Group - the LSE says it selected Fidessa because of "the robustness and ultra low latency of its technology, its ability to meet challenging time scales and for the size and diversity of its trading community".
John Wilson, CEO of Baikal, says the Exchange is making "good progress" towards a phased roll-out of the dark pool this year: "The combination of these technology and service providers together with the London Stock Exchange Group's in-house capabilities and order book technology will establish Baikal at the leading edge of exchange technology, electronic trading services and market connectivity giving it an unrivalled opportunity to be the first neutral liquidity aggregation service."
Initial plans for the introduction of Baikal were disrupted when the LSE's original investment banking partner Lehman went belly-up in September last year. Deadlines for the introduction of the dark pool have since been set-back following a fruitless pursuit of an alternative broker-dealer partnership, leaving the LSE to adopt a build-it-and-they-will-come strategy.
Baikal's first service will be the smart order routing capability to provide a one stop shop for navigating fragmented liquidity across Europe, says Wilson. The Baikal non-display order book, which will be launched later in the year, will use the LSE's TradElect platform, he adds.
Alongside Fidessa, QuantHouse has been selected to provide its QuantFeed platform for market data sourcing, and Smarts Group surveillance technology will be extended to monitor real-time activity on the non-display order book.
At the back-end, settlement will be provided by BNP Paribas Securities Services with clearing offered through CC&G, the clearing house inherited from the LSE's merger with Borsa Italiana.