The outage on Tuesday 2nd November of London Stock Exchange’s new Millennium Exchange system at its Turquoise MTF (see FT articles here and here) has elements of the mystery thriller about it. LSE’s announcement that “human error” which ”may have occurred in suspicious circumstances” was to blame has intrigued us all but there are other open questions to ponder.
CESR has just published the responses to its consultation on Micro-structural issues of the European Equity Markets. These offer some insights into the scale of High-Frequency Trading (HFT) in Europe, summarised below.
Both the Turquoise and NYSE Arca Europe MTFs have announced new markets in US shares during European hours. Will these ventures work when attempts in the past have been unsuccessful?
Well perhaps. But liquidity on the MTFs could be thin until New York opens.
A further question is whether the clearing service offered by EuroCCP is enough for traders to regard the European MTFs as part of the same trading space as the US. Or is it necessary to go a step further and make European trading fully fungible with US trading through a single clearing process?
It is not easy to find a single reference source for European equity MTFs and their post-trade services, so we have compiled this table. We have tried to make it comprehensive and accurate (but please inform us of any omissions…
Ruben Lee has published a magisterial work on the governance of financial market infrastructures – a key question that has never been explored so thoroughly. While his report concentrates on how governance arrangements affect the efficiency and stability of markets,…