OES Prepares to Launch European Routing Platform
August 25, 2008
OES MarketGroup, a Princeton, N.J.-based provider of order-routing and connectivity services, plans to introduce a European platform that will link equities and derivatives venues across the continent.
The service, which is slated to launch by year-end, pending regulatory approval, will be offered through the newly formed OES MarketGroup Europe. Based in London and Luxembourg, OES's European arm will be headed by managing director Peter Keller, former CEO of virt-x--since renamed SWX Europe--a cross-border platform for European blue-chip securities operated by SWX Swiss Exchange.
"There is an overwhelming commercial demand" for independent routing and linkage in Europe, said OES MarketGroup CFO Dave Mitchell, adding that one of the unique features of OES's model is that, unlike other routing systems, it is not attached to a specific trading venue. "There are others trying to do what we do but each one of them is either attached to an MTF [multilateral trading facility] or an extension of an existing exchange that may compete with its members," he said. "We're all about neutrality and facilitating a good, vibrant trading environment and best execution."
David Scheckel, chief executive of OES, explained in a statement that "European capital markets have been undergoing a transformation to a more seamless trading environment, similar to the changes experienced in the U.S. in recent years." Scheckel added that OES will leverage its U.S. experience to serve the needs of European clients in the wake of the Markets in Financial Instruments Directive, which went into effect in November.
Keller will bring to the new OES initiative "his experience in building and running virt-x, as well as his extensive knowledge of the European marketplace," said Scheckel. "Because OES is a technology company at our core, Peter is an ideal addition to our team as he fits the OES profile of being a high-caliber, energetic leader with a hands-on technology background." Keller called the launch of OES MarketGroup Europe "a great opportunity to join a world-class team of experienced securities professionals and to help transform the European trading landscape."
With more execution destinations anticipated to go live later this year, competition in the European market is just heating up, noted Sang Lee, co-founder and managing partner of Boston-based Aite Group. "As the market continues to fragment, the use of routing platforms will only grow to keep up with all of the structural changes to date," he said. "We can certainly expect to see more competition as liquidity migrates from primary exchanges to MTFs."
In December, OES announced that it would provide Bids Trading, a New York-based block trading platform, with a system to route and execute equity orders on venues whose quotes are protected under Regulation National Market System in the U.S. "Secure and reliable high-speed linkages to market centers are essential in today's fast-moving market, particularly for order-protection rule compliance," said Michael Barth, OES's executive vice president of strategic initiatives, at the time. In March, OES said that its clients could begin routing orders to Bids and the Level alternative trading system.
