Equiduct Set for July Launch

The new venue will have a "soft launch," according to Artur Fischer, co-CEO of Equiduct. "We depend on a number of third parties ... [and] client readiness is something that we can't influence," he explains.

Equiduct Trading officials plan to make the official launch announcement in the fourth quarter, when they expect a "sufficient" number of transactions, they add.

The soft launch is expected to involve approximately 20 clients, according to Fischer. "We have 70 members [in Börse Berlin] and for us 20 is not a big number. However, it's a new ball game, so 20 is a figure we feel comfortable with," he adds, without identifying the initial participants.

Although the MTF has sales teams in Germany, France and in the U.K., MTF officials are seeing a lot of interest from U.S. firms as well. "Börse Berlin, from previous years, has U.S. Securities and Exchange Commission (SEC) approval to allow U.S. clients to connect to us, which is a big advantage," says Fischer.

Powering the new trading venue will be the European Trading System (ETS), a proprietary platform that was originally developed in 2000 and adapted for European Association of Securities Dealers Automated Quotation (Easdaq), Nasdaq Europe and Nasdaq Deutschland, says Fischer. In preparation for the launch, Börse Berlin upgraded the platform to reduce the matching roundtrip to less than 10 milliseconds, claims Fischer. The platform has been internally tested and external tests involving existing clients will be conducted before the launch in July, he adds.

Clients will be able to connect to Equiduct Trading through a FIX 4.4 connection. Order management system (OMS) and market data provider Fidessa has created a custom offering that should go live in September, according to Fischer. Additionally, officials from Ullink, a French vendor of transaction management platforms, plans to make its connectivity available at the end of August, he adds. "And we're currently in final discussions with GL Trade."

The MTF will be divided into geographic segments, with each segment following the trading schedule and characteristics of its home markets, and will give access to the local post-trade central counterparty (CCP) environment. LCH.Clearnet will implement CCP services for transactions executed on Börse Berlin Equiduct in liquid European equities (DWT, March 10). Equiduct has recently connected to LCH.Clearnet SA, a wholly owned subsidiary of LCH.Clearnet Group, headquartered in Paris, says Fischer. Deutsche Börse is also being considered as a partner in the clearing space, he adds.

Börse Berlin officials announced last week that Thomson Reuters will be making Equiduct's volume-weighted best bid and offer (VBBO) benchmark available to customers and users of its equities data feeds, within the framework of its real-time market data deliveries. To create the VBBO, Equiduct plans to aggregate market data feeds from all relevant reference markets and apply the appropriate currency exchange rates to produce a consolidated order book represented in a single currency-the euro-as well as each stock's local currency (DWT, Sept. 24, 2007).

"Our clients will be able to get the prices without needing to go to Turquoise, Chi-X, the London Stock Exchange, Deutsche Börse and so on. ... That's a huge cost savings because you only pay one transaction fee," says Fischer.

Equiduct has selected the OneTick platform from Wombat Financial Software, now part of NYSE Euronext's Advanced Trading Solutions business, to manage its market data, as well as Fixnetix to provide low-latency market data services.

The MTF will rely on telecom vendor BT to provide hosting and connectivity to the venue.