NYSE Euronext and two leading European investment banks, BNP Paribas and HSBC, are to be partners in the creation of a Multilateral Trading Facility (MTF), known as Project SmartPool.
This new trading platform is designed to make the execution of large orders in European listed stocks easier.
NYSE Euronext is the first exchange to announce such an electronic block trading market in Europe. Project SmartPool will be accessible to all European sell-side firms.
Project SmartPool is specifically designed to meet the trading needs of large institutional order flow, as a result of MiFID implementation on 1 November, and will complement the limit order book offered by NYSE Euronext in Europe already.
Unlike a traditional exchange, which provides full pre-trade transparency, Project SmartPool will enable users to interact without disclosing their identity or the size or price at which they are willing to trade. This meets financial institutions’ need for minimal information leakage and market impact within the standards set by MiFID. All transactions executed through Smartpool will be publishe post-trade, as required by MiFID.
Project SmartPool will be managed and run by NYSE Euronext, which will retain a majority share of the capital in this joint venture. SmartPool will incorporate the technology used by NYSE Euronext and the existing technical infrastructure that links Euronext with its main European sell-side users. This will enable sell-side firms to start using the SmartPool platform for the execution of large orders in European listed stocks as soon as it is launched.
“With the formation of the Project SmartPool, NYSE Euronext is the first exchange in Europe to announce an electronic block trading market, building a strong alliance between our own experience as the leading European market-place and our partnering banks’ expertise in large order execution. We would welcome further banks who are interested in participating with us in this exciting new project,” says Roland Bellegarde, head of European cash markets and member of the NYSE Euronext Management Committee.
NYSE Euronext and its SmartPool partners are finalising the details of this innovative trading venue, and this electronic block trading platform is expected to be introduced in Q2 2008.