Nyse Euronext (NYX) announced today the introduction of its Single Order Book which means that the liquidity will be concentrated on one single trading line for all securities listed on its Amsterdam, Brussels and Paris cash markets.
The Single Order Book introduces the concept of a "market of reference" (MoR) for each security, for which objective criteria were developed in consultation with issuers and approved by Regulators. In the case of securities with a multiple listing within these markets, trading will take place on a single trading line, the designated MoR. Although there will only be a single line, issuers may still choose to be listed on more than one Euronext marketplace in order to enhance their visibility, qualify for inclusion in local indices or have trading volumes and prices published in the national press.
The Single Order Book was a commitment given at the formation of Euronext to deliver harmonized cross-border trading, clearing and settlement in order to lower costs and provide easier capital market access for its customers. This initiative is directly linked with the delivery on Monday 19 January 2009 of the Euroclear Settlement of Euronext-zone Securities (ESES) Project which will provide the Euronext-zone market CSDs (Central Securities Depositories) with a single settlement location for all securities.
The main benefits of a Single Order Book for investors, issuers and customers are expected to result from an increase in the efficiency, size and liquidity of the market. In addition, cross-border trading will be easier and simpler as the markets are harmonized - one single trading code will be adopted for most instruments and market practices have been harmonised where possible across the three marketplaces. In addition it brings together all the liquidity in each security, which is expected to enhance spreads and market depth in order to achieve better price formation.
Jean-François Théodore, Deputy Chief Executive of NYSE Euronext said: "The delivery of the Single Order Book has been one of the cornerstones of the Euronext consolidation process and has been a significant and substantive project, involving us, Euroclear and our customers all working together across the three original Euronext countries to harmonize market practices and to align legal and regulatory differences. This is one further step towards fulfilling our commitment to make trading cheaper and more efficient for our customers."