THETRADETECH DA I LY
in-depth
THE OFFICIAL NEWSPAPER OF TRADETECH 2018
TRADING VENUES
Venues downplay pre-matched
activity on periodic auctions
INDUSTRY LEADERS REFUTE SUGGESTIONS OF PRE-MATCHING ON PERIODIC AUCTIONS AND SAY REGULATORS NEED MORE
EDUCATION ON HOW VENUES OPERATE.
P
re-matched activity on increasingly popular
periodic auction venues has been over stat-
ed, according to leading industry participants.
MiFID II has seen volumes on periodic auctions
surge significantly since the new regulatory
regime came into force on 3 January, although
regulators and market participants have ques- this is simply not the case,” he said.
Similarly Mark Hemsley, president of Cboe
Europe, agreed with Stenhouse and added that
regulators are looking at the auctions closely as
they do not want to see venues where you can
just submit pairs.
“The regulators do not want to see a reference bilateral,” said Hemsley. “Cboe took great care
and time to go through these constructs to
ensure we did not create just another bro-
ker-crossing network (BCN).”
The panel also agreed that the best execution
venue analysis expected in June under MiFID
II’s RTS 27 will largely be ineffective. Richard
tioned whether activity is broker preferenced
and pre-matched.
Speaking on a keynote discussion panel
Tom Stenhouse, head of product for equi-
ties at the London Stock Exchange Group
(LSEG) claimed around 25% of the exchange’s
periodic auction volumes are self-matching,
and just 10% of that 25% comes through at
auction time while the remaining 90% are
resting orders.
“The natural order flow that we see has
allegedly been pre-matched through these
venues, but we need to educate regulators that “The regulators do not want to see
a reference price waiver book in
disguise that looks like they could
be multilateral but in fact they
are actually bilateral.” Semark, CEO of UBS MTF, told delegates the
information required for those reports should
include more granular detail on order flow.
“The data on venues that we have been
talking about here today are not included in
those reports, but that is what will be useful
when comparing venues,” he said.
Hemsley added the reports are largely “pretty
useless”, and all venues will likely show they are
the best venues in the market because the data
is not defined enough. The buy- and sell-side
will instead rely on brokers for the information
that Semark referred to.
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THETRADETECH DAILY
MARK HEMSLEY, PRESIDENT, CBOE EUROPE
price waiver book in disguise that looks like they
could be multilateral but in fact they are actually