Nasdaq OMX and Burgundy make progress; LCH.Clearnet fights back – 7 May 2009
First Published Monday, 20th July 2009 08:10 pm from Fidessa : Fidessa
The opinions expressed by this blogger and those providing comments are theirs alone, this does not reflect the opinion of Automated Trader or any employee thereof. Automated Trader is not responsible for the accuracy of any of the information supplied by this article.
OMX. Whilst the total volumes are still quite small, the rate of
increase is pretty impressive.
margin-bottom: 0px;" title="nasdaq-omx-weekly-turnover3"
src="http://fragmentation.fidessa.com/wp-content/uploads/nasdaq-omx-weekly-turnover3.png"
alt="Nasdaq OMX Weekly Turnover €bn" width="350"
height="150" />
Nasdaq OMX Weekly Turnover
€bn
src="http://fragmentation.fidessa.com/wp-content/uploads/nasdaq-omx-mkt-share3.png"
alt="Nasdaq OMX Market Share per Index" width="350" height="150"
/>
Nasdaq OMX Market Share per
Index
It seems that a combination
of ultra low cost and focus around targeting specific user groups
(in this case, traders of the CAC40), is paying off. As a result,
the FFI of the CAC40 has risen by 8.5% in just a week. It's
probably too early to tell, but this does seem an endorsement of
last week's comment about how the European landscape might end
up. Speaking with Charlotte Crosswell today she said that they
were hoping to replicate this focussed approach on the DAX and
that they were also seeing more order routed volume flowing
through the platform too.
Also, congratulations to Burgundy on receiving FSA
approval. It looks like the Nordic MTF will now begin operations
in the summer. Olof Neiglick (Burgundy's CEO) did make the point
to me, however, that "SOR is new to the region" and so it will
naturally take some time to build up liquidity on his
platform.
In other news it appears that
competition in the clearing and settlement world is hotting up
href="http://www.finextra.com/fullpr.asp?id=27390"
target="_blank">LCH.Clearnet cuts EquityClear fees).
The rise of MTFs opened the door for lower cost clearers such as
EMCF to step in with lower fees and it now looks like the primary
CCPs are starting to fight back. The real debate, however, is
about what the real shape of clearing should be. The challenge is
to get the right balance between structure (horizontal or
vertical), fees (utility or for profit) and, of course, risk
management. Events over the past 12 months have shown that big
financial institutions can disappear overnight and so the primary
role of CCPs in terms of guaranteeing trades should not be
overlooked.
