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Quote MTF Is Giving Equity Partnerships To Key Trading Firms

European MTF continues to rebuff passive flow rebate model to protect against price discrimination.

Quote MTF, the European multilateral trading facility for Pan-European equities, said it’s giving away up to 40 percent of the company’s shareholding as part of a partnership with key trading firms.

The move is aimed at attracting both passive and aggressive volume to the platform, and is a significant step towards securing support in marketplace under threat of reconsolidation, according to the release.

This latest initiative follows the recently announced ‘fee cap promotion.’ Quote MTF recently announced its intention to cap commission fees at €14,000 from now until 2012 and that it will be extending its product coverage at the end of September to more than 1,350 of the most liquid securities and ETFs (exchange traded funds) across 21 indices and 15 major European markets.

Quote MTF today also confirmed it will continue to rebuff issuing rebates to passive flow in order that it may promote real price discrimination for improved trading opportunities.

Tamas Madlena, CEO, Quote MTF, commented: “Today’s fragmented European equity market represents one of the successes of MiFID. But this landscape, and therefore the trading opportunities and potential for price discrimination, is currently under threat, as many of the existing venues merge or indeed fail due to depressed market volumes. Investors now need to take a long, hard look into the future and take a stake in it. By supporting Quote MTF and its viable, sustainable, low-cost business model through committing a level of flow, market participants will be supporting a future of competition and ultimately, increased trading opportunities.”

Quote MTF’s resolution not to buy passive flow via a rebate costing model underpins the firm’s strategy to provide an open, efficient and economical trading venue, according to the CEO in the release. Madlena explainsed: “It’s difficult to offer the best price to attract retail and institutional aggressive flow if you operate a passive flow rebate model. Indeed, in the next wave of regulatory actions we may see a move against this type of inducement, as it can create a market dominated by high frequency trading, rather than a healthier mix of client, institutional and high frequency flow. Instead of being rebated for committing to a venue, passive flow liquidity providers prefer to find platforms that help them execute trades rapidly and cost effectively.”

Quote MTF has been tested and proven in the Canadian markets via Omega ATS, as a fast, resilient and highly scalable trading environment, stated the release. It requires only a fraction of Europe’s liquidity for the company to breakeven, said the company, adding, that the trading venue promotes sustainable market-wide competition in a post-MiFID world.

Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio

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