FAQs
How does Equiduct Trading ensure transparency - one of the key MiFID requirements?
How will connectivity to Equiduct Trading be effected?
Why should I be among the first to sign up for PartnerEx?
How easily can I change my PartnerEx agreements/clearing and settlement arrangements?
How does the HybridBook guarantee Best Execution?
How does Equiduct Trading ensure transparency - one of the key MiFID requirements?
The Equiduct Trading market model contains a number of features to ensure transparency
These include:
- Pre-Trade Display. Equiduct Trading will enable investment firms to make continuous information available regarding number, size and price of orders. It will post these prices on its website and link to market data vendors for real-time dissemination of order and quote details.
- Post-Trade Display. Equiduct Trading will publish details of trades executed on the exchange or reported to the exchange on its website and will partner with market data vendors for real-time dissemination of these trade details.
- Record Keeping. Customers will be able to obtain information about the snapshot of the reference markets used to calculate a PartnerEx execution. They will also be able to query what the value of the published OrangeVBBO was at any given point in time. They will not be able to get information about their quotes, orders or other executions or trade reports.
What proof can you present of the technical strengths of your platform, e.g. latency of execution, latency of market data? Have you done/are you planning to do any benchmarking of performance?
The performance of the ETS platform has been tested on a number of occasions and we are willing to share the results of those tests on a confidential basis with potential market participants. Equiduct Trading is very much in favour of industry benchmarking of latency figures and will co-operate actively with all initiatives aimed at determining a common definition of market latency and an independent assessment of the actual latency performance of trading platforms.
What stocks will be covered in the first instance when the trading services are launched in the last quarter of 2008?
We will offer trading in liquid securities listed on the UK, German and Euronext markets. The actual list of securities that we will trade as of launch will be determined by member readiness and availability of post-trade connections.
How will connectivity to Equiduct Trading be effected?
Market participants can connect directly to our ETS platform via a FIX 4.4 gateway. However, a number of order management systems (OMS) or independent software vendors (ISV) will also offer an integrated solution for market participants that want to connect to Equiduct Trading using their existing provider e.g. Fidessa.
Why should I be among the first to sign up for PartnerEx?
We are on track in signing up market makers and order flow providers relative to our anticipated launch dates. We provide financial incentives to early adopters that will reduce the cost of connecting to the ETS platform. The Equiduct Trading sales team is available to provide more information on the nature of these incentives.
How will you go about attracting the attention of buy sides/order flow providers? Why is this B-to-B model more appealing to them than using an exchange or an MTF?
In the PartnerEx model, order flow providers can deliver a better price to their clients, or trade at a lower cost than on alternative venues.
For order flow providers, PartnerEx offers an attractive alternative to existing execution options, especially for large orders. Currently, an order flow provider has a number of routes to market for large orders. Giving the order in its entirety to one broker, who puts it out into the market, runs the risk of causing unwanted market movement. Iceberg orders need to be watched, do not lead to a rapid fill of the order and can cause market movement as well. Putting the order into a dark pool is an uncertain method, because the order flow provider does not know whether the order will be picked up.
Under PartnerEx, the order flow provider can have relationships with one or multiple brokers, and be certain of guaranteed best execution up to a certain size. The order flow provider can, if he chooses, spread a large order out among a number of market makers each of which will not know about the rest of the order. Even if the market maker does put the order out into the market afterwards, the order will be seen as the market maker’s, rather than the order flow provider´s, so any market movement will not be related to the order flow provider’s trade.
Overall, the PartnerEx model enables order flow providers to get guaranteed best execution and to exert more control over their brokers than they can achieve with current execution options in the marketplace.
How easily can I change my PartnerEx agreements/clearing and settlement arrangements?
The clearing and settlement parameters can be adjusted daily (end of day; prior to start of trading on next day), provided that the alternative clearing and settlement venue is chosen from a list of approved post-trade venues (as determined by Equiduct Trading) and provided that the PartnerEx partners demonstrate to Equiduct Trading that they have active accounts with these new venues.
How does the HybridBook guarantee Best Execution?
The HybridBook is not only one of the sources feeding into the OrangeVBBO but will also simulate the EBBO in real time to support the special SafeOrder, a tracking limit order which tracks the best price at the opposite side of the virtual consolidated book, which will enable participant retail brokers to guarantee their customer market orders will be executed at the best price.