Dark pool operators have been actively discussing creating bilateral trading links between their dark pools over the last few months in order to pool their liquidity and better meet the requirements for best execution under MiFID.

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4sight Financial Software has outlined plans to offer connectivity to Borsa Italiana members who wish to use the London Stock Exchange’s (LSE) TradElect platform following the recent merger with the LSE and subsequent migration of the MTA listed stocks to TradElect. MTA market members migrating to the LSE’s TradElect platform will be able to take advantage of Connect, 4sight’s TradElect connectivity solution. As an accredited LSE TradElect software provider, 4sight is well placed to assist Borsa Italiana members in meeting the additional connectivity requirements generated by the transition.

Plus Markets has embarked on a series of enhancements to its new OMX Technology trading platform in a push to generate additional trading volumes, liquidity and potentially expand the service to non-equity securities. Changes to the platform – which, says the company, has already helped drive significant volume increases on the ‘market-maker’ model across both FTSE 100 stocks and mid/small caps since it was launched – are expected to be implemented before the end of 2008. They include a number of minor enhancements, which should help in efforts to capture market share, and will be undertaken by OMX technology specialists in conjunction with an internal Plus team.

The Warsaw Stock Exchange (WSE) is set to use Neonet XG Market Gateway as an access solution (Independent Software Vendor) to communicate with its members. By using Neonet XG Market Gateway as an access solution, the WSE allows its members to trade on the exchange using their own membership through Neonet XG’s technical infrastructure, without necessarily using Neonet’s brokerage services. The exchange has also recently signed an agreement with GL Trade to enable GL Trade’s clients to trade on the WSE via the GL Connect ASP service.

The Securities and Exchange Commission (SEC) has issued rules requiring large publicly held US companies to adopt extensible business reporting language (XBRL) for their financial reporting by 15 December. This follows the SEC Advisory Committee on Improvements to Financial Reporting’s report, released in February, which recommended that companies should use XBRL to tag their financial data. The mandate is expected to be phased in for additional publicly held companies once XBRL has become a standard way of making SEC reports.

US market operator IntercontinentalExchange (ICE) has received regulatory approval to establish its own clearing operation in London, which will be dubbed ICE Clear Europe. It has been granted permission to operate in the UK by the UK Financial Services Authority (FSA), following HM Treasury approval and an Office of Fair Trading (OFT) review. ICE Clear Europe is expected to commence operations in July 2008.

Nasdaq OMX Group has selected European Multilateral Clearing Facility (EMCF), a wholly owned Fortis subsidiary, to deliver clearing services for the Nasdaq OMX Pan European Market (MiFID Monitor, March 2008). Settlement will be handled domestically on the Pan-European Market. All trades will settle in the underlying domestic settlement system and accordingly will have settlement fungibility with trades on the primary market.

Agency broker NeoNet is connecting to Turquoise, the multi-lateral trading facility established by nine leading investment banks. NeoNet will offer access to Turquoise for its buy and sell side clients upon the platform’s target launch in September. This announcement follows NeoNet’s recent agreement with Turquoise to provide low-latency, real time market data from across the European equity markets through NeoNet’s XG Market Data.

The pan-European MTF being established by Nyse Euronext in partnership with HSBC and BNP Paribas, Smartpool, has selected EuroCCP and LCH.Clearnet to provide its clearing and settlement services. Both EuroCCP and LCH.Clearnet will support trading of European stocks offered on the London-based electronic block trading platform.

Asset Control has enhanced its data management product Tapmaster by introducing support for portfolios, swaps and money market derivatives, as well as support for Markets in Financial Instruments Directive (MiFID) reporting data. The vendor has also added data connectivity to Princeton Financial Systems’ PAM portfolio accounting system and allowed the capture of real-time tick data from the Reuters pricing data network.

BATS Trading is to use Savvis to support the expansion of its all electronic alternative to Nasdaq and NYSE in to Europe, 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.

FIX Protocol (FPL), Swift and the International Swaps and Derivatives Association (ISDA), the body responsible for Financial Products Markup Language (FpML), have joined with the International Securities Association for Institutional Trade Communication (ISITC) to create an “investment roadmap” aimed at visually mapping the industry standard protocols FIX, ISO and FpML to the appropriate business processes across the major asset classes. The roadmap is aimed at eventually establishing ISO 20022 as the common financial messaging standard, while maintaining the existing independent protocols by developing convergence at the business model level rather than at the messaging level.

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).

While MiFID brings into view the development of a pan-European market at the trading level, the clearing and settlement structure in Europe remains organised largely on national lines with deep-seated regulatory, legal, fiscal and market-practice barriers, points out Tabb Group in a new report, European Clearing and Settlement: Breaking Barriers – Building Alliances. The point has been made before, but Tabb’s report is timely nonetheless.

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Börse Berlin has selected LCH.Clearnet to provide clearing and settlement services for its MiFID-compliant pan-European Equiduct Trading platform, which is expected to launch in the middle of the year. Börse Berlin has signed a preliminary agreement with LCH.Clearnet for the provision of central counterparty clearing (CCP) services for transactions executed on Equiduct Trading. The Equiduct Trading system will enable users to clear and settle trades in domestic post-trade locations and will thus ensure that the post-trade cost of a transaction is at least as low as on the local domestic exchange, it says. LCH.Clearnet will be the first CCP to be connected to the platform.

This will be a “pivotal year” in which swift progress can be made with regards to regulatory co-operation/mutual recognition between the US and the EU, according to a briefing paper form the European Parliamentary Financial Services Forum (EPFSF). It concludes that greater regulatory coherence and co-operation will “enhance market integrity and the capacity to withstand and mitigate shocks”. It further states: “The acceptance of US GAAP equivalence, progress in regulatory recognition in the area of securities and Basel II implementation, improved information-sharing and an efficient framework for regulatory co-operative action will enhance regulatory efficiency, reduce trading costs, deepen market liquidity and deliver wider choice for investors and issuers.” In securities trading, the reports says mutual recognition for exchanges/broker-dealers is beginning to materialise, and refers to a February joint statement between the Commission and the SEC, as well as a speech by SEC Chairman Cox in which he confirmed “the SEC will consider in early 2008 proposals for both mutual recognition for exchanges and greater exemptive relief for broker/dealers”.