MiFID Monitor - Issue 27 - April 2008 (319.1 KB)
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Although many investment firms are reporting issues carrying out MiFID’s reporting and best execution requirements BHF-Bank, a leading German private bank, is busy promoting its solution.

In an exclusive interview with MiFID Monitor, BHF’s Lutz Soor, MD corporate office/strategic products, told us why he believes best execution will eventually have to be done on an order-by-order basis and how BHF-Bank has developed what it believes to be a market leading solution.

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Nyfix has become the latest new entrant in the European dark pool sector with last month’s launch of Euro Millennium, a neutral venue for pan-European listed equities. A year in the making, Euro Millennium has been designed to cater to both buy- and sell-side institutions and was developed with input from an advisory board comprised of institutions from both sides of the fence.

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It’s been quite a month for European clearing and it seems that something unsettling is afoot in the back office.

Could it be that the existing agencies are finally paying attention to Charlie McCreevy’s increasingly vocal complaints that the Code of Conduct between European clearers that he negotiated is progressing too slowly?

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Following its decision to start talks with Nasdaq OMX on the delivery of its next-generation trading system, Genium Trading, in February (Electronic Trading, 28 February 2008) Oslo Børs has now been made aware that Nasdaq OMX has changed the content of Genium Trading and is taking some time to evaluate the possible consequences for its future choice of trading platform.

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Smart Trade Technologies, a provider of liquidity management systems (LMS) automating MiFID and Reg NMS-compliant best execution, has launched an upgraded liquidity management system, smartTrade Transaction Platform (STTP) 5.5.
Key components of this latest release include LiquidityOrchestrator, an advanced smart order router; LiquidityConnect, a new, highly configurable, trading-connectivity platform; LiquidityAggregator, which combines liquidity from external and internal sources; and LiquidityCrosser, a fast, highly scalable matching engine.

4th Story has released 4S.Blue Ridge algorithmic trading server, which can host standard execution strategies such as VWAP, pegged orders, volume participation and pairs/multi-leg management, as well as sophisticated custom strategies for both agency and principal applications. 4S.Blue Ridge can also run smart order routing algorithms to help maximize execution efficiency and meet MiFID and Reg NMS regulatory requirements.

SoftSolutions! has released a multi-trading and multi-asset trading platform. XTrade! Square allows the connection to the Italian bond markets TLX and EuroTLX. The strong increase in volumes, consequently also to the MiFID introduction, has amplified the importance of both market segments, the regulated exchange TLX and the MTF EuroTLX.

BATS Trading is to use Savvis to support the expansion of its all electronic alternative to Nasdaq and NYSE in to Europe (Electronic Trading, April 2008), pledging that its European ECN platform will be hosted in Savvis’s Docklands data centre when it goes live later this summer. Savvis has hosted BATS Trading since its inception in the United States and has provided Proximity Hosting to BATS customers since August 2007 and more recently introduced low latency metro Ethernet network access to the platform via Savvis Exchange Express (Electronic Trading, March 2008).

UK connectivity provider Fidessa Group used this month’s Tradetech Europe event in Paris to announce its post-MiFID Intelligent Liquidity Access strategy, which is designed to help clients deal with what Fidessa expects will be the increasing fragmentation of liquidity between a broader array of execution venues.

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Skyler Technology’s launch of its C3 Liquidity Discovery Solution for the European equities marketplace takes the data aggregation of its flagship product in the US and adds aggregation capabilities tailored to the specific nuances of Europe. The system is aimed at allowing firms to gain greater insight into market liquidity as it fragments under the new EU Markets in Financial Instruments Directive (MiFID).

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Five months ahead of the planned September launch of its trading platform, Turquoise Trading, the multi-lateral trading facility (MTF) established by nine leading European investment banks, says it’s received commitment from 38 largely sell-side firms to connect up to the hybrid trading model from day one.

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Telco GemaTech has launched a new telephony recovery and recording solution aimed at the dealing room. The system offers to help firms comply with MIFID’s business continuity requirements, as well as new voice recording regulations, such as those due to be introduced by the UK’s Financial Services Authority (FSA) next March (MiFID Monitor, March 2008).

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A recent survey shows 80 per cent of financial institutions firms will find it difficult to prove – for MiFID’s required five-year window – that orders, executions and allocations were processed correctly.

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At its inaugural London event last month, the first Forum conference series looked at the challenges, opportunities and impact of MiFID in the short and medium term in the context of the wider regulatory landscape. Topics ranged from the effectiveness of principles-based regulations, to best execution and emerging technologies.

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When preparing the Markets in Financial Instruments Directive (MiFID), the EU Commission was keen to underpin the new, more open cross-border trading environment with adequate levels of market supervision by regulators. As a result, MiFID also contained provisions setting minimum securities transaction reporting requirements for all investment firms with a reporting obligation.

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In the Pink Panther movies, not only is the eponymous jewel flawed, but Inspector Clousseau has his housekeeper attack him unexpectedly when he arrives home. Are the parallels between this iconic ‘60s’ movie and firms data security something we can learn from, asks PJ Di Giammarino, CEO, JWG-IT Group Limited

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European Central Counterparty (EuroCCP) – the DTCC-owned clearing and settlement subsidiary that will provide services to Turquoise (MiFID Monitor, April 2007) – has received approval as a UK Recognised Clearing House (RCH) by the Financial Services Authority (FSA).

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Bats Trading has named Mark Hemsley chief executive of Bats Trading (Europe) and appointed Paul O’Donnell as chief operating officer of the newly formed entity (Electronic Trading, 31 March 2008), which is based in London.

Instinet has appointed Richard Balarkas, who joined its subsidiary Instinet Europe Limited (IEL) in December 2007 (MiFID Monitor, December 2007), as president and CEO. Balarkas joins COO Clive Triance and CFO Stephen Corker to form the new IEL senior management team.