THETRADETECH DA I LY
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TRADING VENUES
Cboe Periodic Auction smashes
€1 billion daily barrier
CBOE EUROPEAN PERIODIC AUCTION BOOK EXCEEDS €1 BILLION DAILY NOTION-
THE OFFICIAL NEWSPAPER OF TRADETECH 2018
TECHNOLOGY
ASX blockchain
post-trade system
live by 2021
AL VOLUME TRADED FOR THE FIRST TIME.
TESTING OF ASX’S NEW BLOCK-
CHAIN-BASED POST-TRADE SYSTEM TO
BEGIN IN Q2 NEXT YEAR, WITH INDUS-
TRY-WIDE TESTING IN Q1 2020.
T
E
xchange operator Cboe’s European Periodic Auction book has set a new one-day record of
€1.08 billion notional value traded.
The new record was set on 24 April and surpasses the previous one-day record of €969.2 mil-
lion set on 27 March this year.
“The rapid adoption of our Periodic Auctions book demonstrates that market participants are
finding value in executing their trades in a venue that provides minimal market impact,” said
Mark Hemsley, president of Europe for Cboe.
“With its true price formation process providing pre-trade transparency that adheres to MiFID
II requirements, our Periodic Auctions book is groundbreaking in the marketplace.”
MiFID II’s restrictions on trading in dark pools and the banning of broker crossing networks has
seen the rise of venues like periodic auctions and systematic internalisers since the rules came
into force at the beginning of this year.
The rules around dark trading were implemented on 12 March following an initial delay due to
incomplete and inefficient data to calculate double volume caps to restrict dark pool trading.
The EU financial watchdog published data on securities which would be affected by the caps
earlier this month.
The Cboe Periodic Auctions book was first launched in 2015 and is a separate lit book that
operates randomised intra-day auctions throughout the day. Due to the nature of the auctions,
information leakage is minimised and large orders prioritised as part of the process.
6
THETRADETECH DAILY
he Australian Securities Exchange (ASX) plans
to go live with a new equity post-trade system
based on blockchain technology by the first quarter
of 2021.
In a consultation paper published by the exchange,
the new clearing and settlement system designed
by blockchain specialist Digital Asset will be com-
pleted between the end of 2020 and Q1 2021.
“ASX is proposing a single cutover weekend from
CHESS to the new system, based on feedback from
stakeholders and the positive experience with other
more recent transitions being conducted on a simi-
lar basis,” the consultation said.
ASX aims to start software testing from the
second quarter of 2019, followed by industry-wide
testing in Q1 2020. Migration testing is then expect-
ed to begin in June 2020 with migration rehearsal
weekends in preparation for the go-live.
The blockchain project was heralded as a potential
turning point for the post-trade industry at Sibos
last year and could serve as the basis for other mar-
ket infrastructures to revamp their systems using
the technology.
Blythe Masters, Digital Asset CEO, described at
the time ASX’s final decision on using blockchain
as being “the first meaningful proof that the tech-
nology can live up to its potential”.
While Digital Asset’s technology has not yet
been proven to operate at such scale, the potential
benefits are numerous. According to ASX, the tech-
nology should provide greater market efficiencies
through better record keeping, reduced reconcilia-
tion, more timely transactions and enhanced data
quality.
“The changes ahead will lead to innovation in
new products being available to investors opening
up further offerings and the potential for further
offshore investment into Australia,” said Johann
Palychata, head of blockchain, BNP Paribas Securi-
ties Services, which is an investor in Digital Asset
and helped consult on the ASX project.
“This will provide the opportunity to challenge the
inefficiencies in the end-to-end value chain and the
removal of redundant processes making the market
a lot more streamlined, efficient and flexible, espe-
cially in terms of timings and ability to change.”