MTF NEUROsis - 29 April 2010
First Published Friday, 30th April 2010 02:05 pm from Fidessa : Fidessa
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href="http://ir.nasdaq.com/releasedetail.cfm?ReleaseID=464105"
target="_blank">confirmed this week that it will close
NEURO, its London based MTF, at the end of next month.
Given that it was backed by the mighty
href="http://www.nasdaqomx.com/" target="_blank">NASDAQ
OMX why did it fail and is this the end of the MTF
model as we know it?
It didn't help
target="_blank">NEURO launched at the height (depth)
of the credit crisis, but it always seemed to struggle to develop
href="http://www.chi-x.com/home/home.asp"
target="_blank">Chi-X was first and title="Turquoise" href="http://www.tradeturquoise.com/"
target="_blank">Turquoise had a bunch of investment
banks priming it with liquidity whilst
href="http://www.batstrading.co.uk/"
target="_blank">BATS has always picked its fights
carefully and punched effectively above its weight. So
what's next?
Fragmentation continues
on the same trajectory - upwards - and, it seems, is spreading to
new areas too. On this point, I was at an event organised by
href="http://www.goodacreuk.com/index.html"
href="http://www.apcims.co.uk/"
target="_blank">APCIMS on Monday where title="Citadel" href="http://www.citadelgroup.com/index.php"
target="_blank">Citadel's Matteo Cassina
href="http://www.equiduct-trading.eu/home/home.asp"
target="_blank">Equiduct's Peter Randall
target="_blank">their MTF in the RSP space. This
struck me as a good example of what it's all about.
href="http://www.equiduct-trading.eu/home/home.asp"
target="_blank">Equiduct enables title="Citadel" href="http://www.citadelgroup.com/index.php"
target="_blank">Citadel to bring its very efficient
market making to bear on retail order flow. This narrows spreads
which is good for best execution but challenges the existing RSP
market makers.
The same is true for the
mainstream MTFs as they enabled other HFT market makers to step
to the front of the queue for institutional flow in a very
href="http://www.nasdaqomxeurope.com/"
target="_blank">NEURO seemed unable to attract these
sorts of players and so was unable to build enough momentum to
gatecrash the fragmentation party.
Anyway, I
href="http://www.nasdaqomxeurope.com/"
target="_blank">NEURO's CEO Charlotte
Crosswell and her team are both talented and dedicated so
I'm sure they will make their presence felt as the
liquidity war intensifies.
