The Gateway to Algorithmic and Automated Trading

Diary of an Investigation - Day five

: - 1st January 1970

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I managed to have a chat with Paul O'Donnell, COO BATS, and author of the white paper report on MTF price formation. Paul is adamant that the MTFs are already capable of price formation and his report provides evidence of that nature.

"The liquidity on our market didn't change and it was absolutely rock solid the whole way through the outage. It is absolutely the case that when the LSE is gone there is enough liquidity to sustain the book."

Paul also gives his views on a possible trading landscape over the next 24 months and how he expects venues to react in this competitive market place.

"Our broad view on competition across the board, not just with the LSE, is with any defined market segment we don't see any one trading platform as capable of sustaining more than probably 30% market share."

With the transition of technology at the LSE there is a feeling that more outages may occur in 2010 and so firms are developing contingencies to combat this. The LSE will have their fingers crossed for a smooth transition to MilleniumIT but such a major technology shift rarely happens without teething problems.

Click HERE to read the full interview with Paul O'Donnell.

I'm coming to the end of my investigation and I have managed to talk to several key players in the market. It is clear that that we are in a time of change and adaptation. The next 12-24 months will form a basis for how our markets will look in years to come. The competition in Europe is in full swing and one thing is for certain, 2010 will hardly be dull, and as firms find their feet innovation will surely follow.

If you would like to contribute to this debate please contact David Dungay directly.

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