Investec Securities and Shore Capital today became the first Retail Service Providers (RSPs) to use the London Stock Exchange’s new Gateway trading service to provide quotation and execution services to private client brokers.
The Gateway works by linking RSPs and private client brokers through a single Exchange network connection rather than multiple proprietary connections that together can be costly to establish and maintain. As usage of the Gateway builds, it will create a step change in the efficiency of market infrastructure.
Other RSPs who intend to offer services to brokers through the Gateway include: Altium Capital, Robert W Baird, Beeson Gregory, HSBC Investment Bank, Knight Securities International, R A McLean & Co Ltd, Van der Moolen Bonds, JP Morgan Securities Ltd and Teather & Greenwood Ltd.
RSPs will use the Gateway to offer a range of trading services, between them covering almost 1500 stocks, both blue chips and small caps. JP Morgan and Van der Moolen will use the Exchange service to offer trading in covered warrants and bonds, respectively, from the end of September.
Brokers will access the Gateway through their own in-house software or through one of the front-end applications provided by vendors. Consort, Misys Securities Trading Systems and royalblue have all passed the Exchange’s readiness testing procedures necessary for their front-end application. Others such as Orc Software and Pershing are proceeding with their development.
Chris Broad, Head of Broker Services at the Exchange, said: “This Gateway service will cap, and ultimately bring down, the industry cost of creating and maintaining multiple electronic connections between brokers and RSPs. It also gives private client brokers access to a wider range of RSPs and in so doing will stimulate more choice in quotation and execution services.”
Simon Mathias, Director of Dealing at Shore Capital, said of the Gateway: “We are delighted to be one of the first market makers offering competitive quotes on the Stock Exchange’s centralised RSP Gateway. This will provide the electronic platform for us to offer quotes to a wide range of stockbrokers.”
Perry Crosthwaite, Chairman of Investec Investment Banking and Securities, added: “We are delighted to have been closely involved with the Stock Exchange in the development of the RSP Gateway. We foresee significant benefits for retail brokers and their clients in terms of connectivity and best execution. The RSP Gateway will broaden our distribution base allowing us to connect efficiently to retail brokers.”