Monday, June 11, 2007

More banks may join Project Turquoise

So much for sabre rattling. The prospect of multilateral trading facilities setting up in opposition to the national exchanges is not just a bunch of the world's leading investment banks making a lot of noise in order to get the national exchange monopolies to drop their trading costs.

When Project Turquoise, the MTF announced by seven leading investment banks to challenge the monopoly on equity trading by the national exchanges, was first announced, some suggested it was merely a ploy by the investment banks to get the stock exchanges to reduce their trading costs. Once the exchanges had dropped their tariffs, it would disappear into thin air.

Well some of the exchanges are already reviewing their tariffs and having announced the appointment of EuroCCP (European Central Counterparty), a subsidiary of the DTCC, as its clearing agent, Project Turquoise, appears to be a goer. According to a Financial News report, Société Générale and BNP Paribas may also be joining Project Turquoise.

All Project Turquoise has to do now is choose a trading platform (believed to be a toss up between the Nordic Exchange Group OMX's technology and Instinet's Chi-X), appoint a CEO, attract sufficient liquidity and Bob's your uncle.


Baldermort said...

I think that not only is Turquoise serious, but it will have a large effect on the markets as we know them. The boat people will be publishing data that we have previously not seen. It was hidden away in the pools of dark liquidity. In addition to the boat, we will also have Turquoise, Equiduct and Instinet operating as various forms of MTF. These platforms will seek to advertise the depths of liquidity in order to attract business. One obvious way to do this will be to publish tick and quote data. Some of them have already announced that they plan to do this "at cost".
Whilst there will be various levels of prepared, one of the major effects of MiFID will be a very large increase in the number and frequency of tick and quote information. There will be a need to aggregate all of this data. This will make it harder for the CEP applications to keep up. The Algo trading systems will need to be able to cope with 27-Feb-2007 like it was an every day event. This will also result in a need to re-think some of the architecture issues related to how we store truly vast histories of diverse tick and quote information.

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CityUnslicker said...

well the y chose OMX so it is off and run. We should swap links.


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