Trading US Stocks European Style – 20 April 2010
First Published Tuesday, 20th April 2010 02:06 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.
Few can have missed the announcements from the title="Turquoise to Launch US Equity Trading"
href="http://www.tradeturquoise.com/press/Turquoise%20to%20launch%20US%20Equity%20Trading.pdf"
target="_blank">LSE's Turquoise and title="NYSE Arca Europe to launch U.S. Equities"
href="http://www.euronext.com/news/press_release/press_release-1731-EN.html?docid=848655"
target="_blank">NYSE Arca Europe that they will each
soon begin trading US stocks. Both venues will aim to attract the
HFT/algo community which will be able to exploit differences in
prices between these platforms and their US counterparts. On this
href="http://www.tradeturquoise.com"
target="_blank">Turquoise plan is particularly
aggressive as it will allow users to trade for free initially.
This shows just how determined senior management at the title="LSE Group"
href="http://www.londonstockexchange.com/home/homepage.htm"
target="_blank">LSE Group really are, not just to
win back market share but to really get on the front foot in the
battle for liquidity. Certainly
target="_blank">David Lester, the new Turquoise CEO,
sees Turquoise as just the right kind of vehicle they need to
help achieve this and introduce new business models
quickly.
The interesting thing in all this is
whether any such trades fall within the remit of MiFID or not.
Obviously US stocks are not included within the title="CESR" href="http://www.cesr-eu.org/"
target="_blank">CESR list and so it would seem that
they should not fall under any kind of MiFID best execution
requirement. On the other hand they are being traded and cleared
in Europe and so it seems unlikely that any such transaction
would come under the aegis of the
href="http://www.sec.gov/" target="_blank">SEC.
Maybe they are exempt from either which raises some interesting
issues in the current environment where the overriding view is
that we need more, rather than less, regulation. Alternatively,
we might see a real touch point on this issue with the very
different US trade-through rules having to be interpreted through
MiFID style best execution obligations. Not sure that matters for
the HFT boys but I guess retail punters like me will be able to
ask that pesky MiFID question again next time we want to buy some
more stock in Apple or Google.
Anyway, title="NYSE Arca Europe"
href="http://www.euronext.com/landing/landingNAE-40818-EN.html"
target="_blank">NYSE Arca Europe and title="Turquoise" href="http://www.tradeturquoise.com"
target="_blank">Turquoise should be commended for
coming up with new ideas that the incumbent MTFs might find hard
to challenge. I wouldn't be surprised if they started
to flex their multi-asset muscles further in this respect
too.
