Plato Partnership, a collaborative group of buy- and sell-side firms, has announced a formal agreement with multilateral trading facility (MTF) Turquoise aimed at increasing efficiency in European dark pool equities trading.
The agreement marks the formal establishment of both the Plato Partnership and the creation of the Turquoise Plato brand, under which the Turquoise Block Discovery service and Turquoise Uncross auction platform will be renamed as Turquoise Plato Block Discovery and Turquoise Plato Uncross. Plato will be responsible for the joint-operation of the services, as well as Turquoise's mid-point order book.
The collaboration of the buy and sell side and the trading venue, owned by the London Stock Exchange, is aimed at creating greater efficiency across European non-lit equities block trading through reducing trading costs, offering greater transparency and simplifying the market structure. Profits generated through the consortium will fund and commission research through the partnership's Market Structure Innovation Center.
"The creation of a vehicle to improve equity markets based on a not-for-profit ethos and value chain representation is a truly unique proposition, and very important for the buy-side community," said Mike Bellaro, Plato co-chair and global head of equity trading at Deutsche Bank Asset Management, in a statement. "The equal participation of the buy side in Plato reflects the demand for a vehicle that considers the needs of the marketplace ─ focusing on providing liquidity and reducing cost ─ and ultimately improving the trading experience for our clients."
Plato Partnership is the first collaborative group including buy- and sell-side firms to take charge of an equities trading platform, counting organizations including Axa Investment Managers, BlackRock, Deutsche Asset Management, Fidelity International, Union Investment, Barclays, Bank of America Merrill Lynch, Citi, Deutsche Bank, Goldman Sachs, Morgan Stanley, and UBS among its members. According to Plato, JP Morgan is also currently under review to join the group.
LSE's Turquoise was selected by Plato in July last year as its technology development partner following an online poll, which also included Aquis Exchange, BATS Chi-X Europe, Cinnober, Euronext, Nasdaq and BIDS Trading.
"With Turquoise Plato, the industry has a Large in Scale electronic execution channel that works," said Robert Barnes, CEO of Turquoise, in a statement. "Turquoise Plato offers neutral and trusted MiFID II-compliant mechanisms for executing larger anonymous block orders above 100% of Large in Scale thresholds."
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