Pan-European Platforms Form Symbology Working Group
October 22, 2008
Chi-X Europe, Nasdaq OMX Europe and BATS European Markets Division have formed a working group to create a uniform symbology for European equities. The three companies said today that the initiative will allow market data to be more easily consolidated across trading venues and facilitate smart-order routing.
“A common symbology will ease navigation between market centers and ultimately provide a better experience to investors,” said Todd Golub, head of markets development at Nasdaq OMX Europe, in a statement. “This move will also reduce the back-office complexities” related to the European Union’s Markets in Financial Instruments Directive (MiFID), which went into effect about a year ago. Nasdaq OMX Group’s multilateral trading facility (MTF) began limited operations Sept. 26.
“Customers will now only need to manage one common list” of symbols, Golub added in an interview. “It will also drive down the cost of trading in Europe and help liquidity move from the primary exchanges.” Participation in the effort is open to all European venues--both exchanges and MTFs--said the companies.
European market centers have proliferated as MiFID has encouraged cross-border competition, which many expect to lead to U.S.-style fragmentation. But “fragmentation hasn’t been a huge issue in the U.S. because of the consolidated feed, which delivers a view of the entire market,” Nasdaq OMX Europe president Charlotte Crosswell said in a recent interview with Securities Industry News. “From an investor perspective, we believe that there will be firms taking advantage of the demand for getting consolidated market data feeds.”
Chi-X Europe, which launched in March 2007, sees the initiative providing opportunities for market participants. “By having common symbology, clients can compare their market data and it also helps with programming their smart-order routers,” said Hirander Misra, COO of the Instinet-backed platform. “They don’t have to program for many different symbols.”
Added Misra in a statement: “Collaboration on open initiatives such as a common symbology should help the European market become more attractive not only to investors in Europe, but also the international trading community.”
Paul O’Donnell, chief operating officer of Kansas City-based BATS Trading’s European venture, which is slated to become operational Oct. 31, stated that “the European equities market proves time and again that it can respond to the needs of its participants and this no exception. By working with Chi-X Europe and Nasdaq OMX Europe we have identified a market need and the potential complexities fragmentation can create and have responded accordingly.”
NYSE Euronext is planning to roll out two MTFs next month--NYSE Arca Europe and SmartPool, a block trading venue it co-owns with BNP Paribas, HSBC and JP Morgan Chase & Co. Consortium-backed Turquoise began operations in August.
