Six investment banks have launched a voluntary initiative to improve post-trade transparency in the European over-the-counter equity markets.
The six banks – Citi, Credit Suisse, Deutsche Bank, J.P. Morgan Cazenove, Morgan Stanley and UBS – will now report the volumes of cash equity trades crossed in their automated crossing systems via a service provided by Markit.
Reporting will begin today, 24 May, following live testing over the past two weeks.
At the end of each trading day Markit will collate the data from each participating bank, conduct validation checks on the information, and publish the aggregated trading volumes the following afternoon. This data will be freely available on www.markit.com.
The data will cover automated crosses only, including trades matched on systems such as Citi Match, CS Crossfinder, DBA, JPM-X, MSPool and UBS PIN.
In line with the Mifid rules on reportable trades, it will include trading between clients of the executing broker and trading between brokers and their clients.
Volumes will be published on an aggregated basis and will be broken down by country. During testing the daily percentage of trades reported in this way has ranged from 0.62 to 1.02 per cent of total European trading.
“This initiative is designed to bring further transparency into this area of OTC trading by providing verified data where previously there has been only speculation, and by giving a clear indication of the actual levels of trading in crossing engines,” says John Serocold of the Association for Financial Markets in Europe. “As a further step in support of making more information freely available to all market participants, it should provide useful data for the Mifid review being undertaken this year.”
Sophia Kandylaki, director of equities at Markit, says: “Markit is pleased to facilitate this initiative which will give participants insight into how much is traded through banks’ crossing systems on a daily basis. This information will bring greater transparency to the European equity markets.”
