It’s no secret that in recent years the big banks have been more than eager to do deals with exchanges (or in competition with them) carving out trading pools in a global arena where exchanges are raking it in on trading volumes that rise, rain or shine. Here’s how the bank positioned itself to cash in when London Stock Exchange CEO Clara Furse found herself looking for a partner, plus a preview of what this new multilateral trading facility will be capable of.
The London Stock Exchange has unveiled plans to create a pan-European non-display trading platform in partnership with US investment bank Lehman Brothers.
The multilateral trading facility (MTF), to be named Baikal, is for the execution of non-display orders. The Exchange said that Baikal will seek to “address the growing complexity of order execution requirements by allowing buy-side and sell-side participants to trade larger orders in a trusted environment, thereby minimising market impact.”
Key features of the service are: open, equal access to securities across 14 European countries; an extensive suite of dynamic, liquidity seeking algorithmic trading strategies; surveillance tools; real-time post-trade reporting included in the LSE’s Infolect feed; pan-European clearing and settlement solution.
“Baikal provides an exciting opportunity for the market to transact certain types of business in European equities with the confidence of total pre-trade anonymity, alongside the efficient price formation of the electronic order books of exchanges, where the majority of equities across Europe are traded,” said Clara Furse, chief executive of the London Stock Exchange.