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Changing the game for
SME block liquidity
Veronica Taylor, head of Euronext Block, tells The TRADE about Euronext’s
continued focus on dark large-in-scale trading, as the exchange’s block MTF
completes its transition to Euronext’s state of the art technology platform, Optiq.
How is Euronext providing the
ability to trade block orders to its
members?
Our focus now is all things dark
large-in-scale (LIS) trading and for
this we have two solutions. Firstly,
we have the Euronext Block
multilateral trading facility (MTF),
which is the pan-European venue
we launched a year and a half ago,
and secondly, we have Euronext
Dark LIS which sits on our regu-
lated central order book. We are
committed to helping our members
execute blocks safely, whether on
our MTF or on our central order
book.
The idea behind Euronext Block
was to provide a solution for our
clients that want to trade in the
dark above large in scale (LIS). We
decided to offer LIS trading only
on Euronext Block because we
were keen to alleviate the burden
for clients who may have to work
out if their order is eligible for LIS
or which waiver they are using, so
all of the orders on the platform
use the LIS waiver. Our primary
aim is to become the venue of
16 // TheTrade // Spring 2019
choice for sourcing small and mid-
cap block liquidity. We spoke with
many asset managers about the
launch of Euronext Block, enquir-
ing as to whether they would like
to see new order types, or perhaps
a request for quote (RFQ) function,
but it was clear that the problem
for the buy-side is not around the
order types to execute these blocks,
but sourcing liquidity on tradition-
ally illiquid stocks.
Euronext Block is a venue hosted
in London and regulated by the
Financial Conduct Authority. That
itself has generated a new set of
opportunities which coincide
with our wider strategy for our
MTF, as we are planning to open a
European entity for the platform,
post-Brexit. For us, it’s a natural
shift and with the new European
entity, any new clients that want
to trade on Euronext Block will be
able to do so seamlessly.
How does Euronext offer midpoint
execution?
There has been a lot of talk lately
around midpoint and sub-tick
execution. For block trading, our
clients have raised many concerns
and questions on the issue. The
buy- and sell-side have specifically
told us that midpoint execution
and the ability to match at the mid,
even if that mid happens to be sub-
tick, is crucial.
Midpoint trading is firmly in
place on Euronext Block, and
it will soon be available on the
Euronext central order book for
midpoint-to-midpoint dark LIS
trades. While we offer limit and
orders you can peg to the offer,
the vast majority of our clients
use midpoint pegged orders on
Euronext Block MTF.
Can you provide some insight into
the recent migration of Euronext’s
Block MTF to Euronext’s Optiq
technology?
It was very successful, which was a