Aquis Exchange is introducing a new order type – Market at Close (MaC) – that allows its Members to enter orders for matching on the Aquis Exchange platform at the closing price of the market-of-listing end-of-day auction.
This initiative is supported by a number of key asset management and brokerage firms.
MaC meets pre- and post-trade transparency requirements and, crucially, will not be subject to MiFID II restrictions for the use of reference price waivers. MaC has received approval from the UK’s Financial Conduct Authority. It will be offered at no additional cost to Aquis Exchange Members that are top-tier subscribers.
The new initiative is supported by a range of large buy-side institutions including Legal and General Investment Management. Early sell-side adopters include Instinet and Société Générale.
Currently, about 20% of all trading in Europe is conducted in closing auctions – approximately EUR1.2 trillion annually. Fees charged at the auction are typically 50-100% higher at this point in the day than at any other time as a result of the lack of competition, making the closing auctions a particularly lucrative segment of the market for exchanges.
Commenting on the announcement, Alasdair Haynes, CEO of Aquis Exchange, says: “This is a major development for the market. While MiFID I paved the way for new venues to compete against the trading monopolies held by national exchanges, the closing auctions had remained virtually unchallenged. Through the highly sophisticated, but simple-to-use, technology of MaC, Aquis Exchange has for the first time opened the closing auctions up to competition. This is another innovation from Aquis Exchange that will improve the marketplace as a whole and yield major cost savings for our Members.”
“Société Générale encourages market innovation that benefits its clients. We are fully supportive of the Aquis initiative and will follow its development with great interest,” says Richard Hills, Global Head, PT and Electronic Trading at SGCIB.
