Nasdaq OMX has inked a deal with Citi that will see the bank provide electronic routing of orders from its new pan-European platform to other exchanges and venues across the region.
In a statement, the transatlantic exchange operator says the deal means its soon-to-be-launched Nasdaq OMX Europe platform will become the first multilateral trading facility (MTF) to provide a pan-European order routing service.
In addition to providing market participants with access to the Nasdaq OMX Europe order book, the partnership with Citi will enable customers to access multiple pools of liquidity across Europe, says the exchange.
"By partnering with Citi we will offer efficient, fast, and low-cost routing through Nasdaq OMX Europe to European primary markets and other MTFs," says Charlotte Crosswell, president, Nasdaq OMX Europe. "We will offer participants the ability to access markets throughout Europe through a single connection."
Citi will provide services via its its high-speed execution platform, which includes the Neonet XG Market Gateway product.
Earlier this year interagency broker Instinet Europe - which has a majority stake in the Chi-X Europe pan-European MTF - said smart order routing is key to success for agency brokers operating in the increasingly fragmented post-MiFID market. Richard Balarkas, CEO of Instinet Europe, said the introduction of MiFID had not resulted in any evident deterioration in liquidity opportunities, price formation or execution performance and by using innovative smart-routing technology, the firm had been able to exploit significant pricing opportunities on behalf of clients.
Chi-X Europe was the first MTF to launch in the European market and is now thought to have taken a 15% market share of FTSE 100 stocks.
Turquoise, the equities trading facility established by nine investment banks, finally went live on 15 August and has since been adding new markets to the offering. The London-based outfit said last week that all of the 13 markets available for trading had concluded settlement cycles. Following this, the full universe of 1300 stocks across 13 European markets was available on Turquoise on Friday.
Turquoise CEO Eli Lederman says during the platform's first week of trading "every day surpassed the one before it in number of orders, executions and notional value".
"At points during the days we had two, three and four per cent market share in some names where members were market-making, which bodes well for the time when market-making will be broader-based and deeper," he adds.
Turquoise and Chi-X Europe are set to be joined in Europe by Bats Trading and Equiduct as well as the Nasdaq OMX Europe platform. The Financial Times reported last week that there are two or three more MTFs still "waiting in the wings".
In a sign of its growing concern over the new rivals, the London Stock Exchange (LSE) has cut fees and introduced incentives for liquidity providers in a bid to attract algorithmic traders.
Under the new tariff system - which kicks in today and applies to all trading clients - the LSE has dropped the 7.5 pence execution charge from both sides of trading, the one pence order management charge and the maximum per trade charge.