Euronext, the pan-European exchange, is creating a new block trading service for equities, for launch later this year. The service will enable institutional investors to shield their trades for large blocks of shares from high-frequency traders.
The new service is being produced as part of a strategic partnership with AX Trading, based on their technology and owned/ operated by Euronext.
The service will cover large in scale orders in European equities from small caps to blue chips. Market participants across Europe will be able to execute blocks in a trusted environment that bridges the gap between human, high-touch trading and electronic, low-touch execution. The platform is scheduled for launch in mid-2017 pending regulatory approval.
Euronext explained that in "today's block trading venues, both sides of a block order are rarely active in the market at the same time. Trust and collaboration are fundamental to unlocking potential trading opportunities at this scale. Euronext's new platform will allow users to proactively source liquidity by enabling the dissemination of indications of interest and thereby solicit potential counterparts to a trade. Uniquely, users will have full control over the content and distribution of these indications of interest, addressing concerns over information leakage. The platform will be complemented by a sophisticated analytics framework and various trading safeguards to ensure the highest level of protection to optimize execution performance."
Lee Hodgkinson, Head of Markets & Global Sales at Euronext said: "We recognize that flexibility and choice are vital in achieving best execution. The new block trading service will therefore complement our core lit market with a sophisticated yet simple way to execute large orders on a truly pan-European platform, minimizing information leakage and market impact. We are delighted to establish this MiFID II compliant service in partnership with AX Trading. Together we will create value for the buy and sell-side in their search for better solutions to the long term challenge of executing blocks."
George O'Krepkie, Chairman & CEO of AX Trading added: "The partnership with Euronext represents a shared vision for the future of block trading globally. The partnership is in response to the demand of portfolio managers and traders worldwide for a tool where they genuinely control their trading strategy. This partnership means that the ability to execute blocks on demand, even within continuous markets, will be met, that buy-side portfolio performance will be enhanced and the sell-side will have the opportunity for increased profitability."