Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Careers

00:00 AM
Connect Directly
RSS
E-Mail
50%
50%

Bloomberg Tradebook Talks "Sweep" with E-Crossnet in Europe

Institutional customers of Bloomberg's Tradebook ECN to sweep orders into E-Crossnet's four intra-day crosses.

E-Crossnet, a European crossing network comprised exclusively of institutional investors, and Bloomberg are discussing a deal that would allow institutional customers of Bloomberg's Tradebook electronic communications network (ECN) to sweep orders into E-Crossnet's four intra-day crosses.

The potential "sweep" agreement would represent an extension of a partnership the two firms formed last October, when E-Crossnet selected Tradebook as its technology provider. Launched in March, E-Crossnet-which recently announced that it had crossed $1.6 billion in its first two months of operation-uses Tradebook's matching engine as the backbone of its crossing network.

Interestingly, in the U.S., Tradebook also has a partnership with the Investment Technology Group's Posit crossing network, a competitor to E-Crossnet in Europe. That deal, consummated last spring (ETW, 06/01/99), stipulated that Posit and Tradebook would inter-link their engines to form a so-called SuperECN. In accordance with that agreement, the vendors have created the ability for Tradebook customers--who have orders matched on a continuous basis--to sweep orders into Posit's periodic crosses, which match orders at the midpoint of the going bid/ask spread for a stock seven times a day in the U.S.

"The nice thing about that is Tradebook clients get anonymous representation into Posit, and they're only out of the continuous environment for a very short period of time," says a source familiar with the Posit/Tradebook agreement. "We have just gone live with the capability, so it's really too early to tell whether it will be greatly successful. But conceptually, we think it's a really big deal."

Meanwhile, in Europe, the source says, Tradebook and E-Crossnet are "in discussions" about creating a function that will be "analogous to the Tradebook/Posit" sweep. The source says this is an appealing option for Bloomberg's institutional clients because whatever orders aren't matched during E-Crossnet's periodic crossing sessions could be "seamlessly routed" back to Tradebook's continuous environment.

Nigel Foster, chief executive officer of E-Crossnet, says that the firm is talking with Bloomberg about "a number of things," but declines to specify those issues. Thus far, he says, E-Crossnet is satisfied with the work done by both Bloomberg and Merrill Lynch, the firm's executing broker and clearance and settlement provider.

E-Crossnet, which only allows institutional investment firms to participate in its network, covers 2,500 equities spread across 14 European countries. Ownership stakes in the crossing network were initially split up only between its founding partners--Barclays Global Investors (BGI) and Merrill Lynch Mercury Asset Management (MLMAM)--but are now available to all E-Crossnet participants. Foster says that some E-Crossnet participants have already "subscribed" for ownership stakes, but he declines to specify them.

To date, 32 buy-side money management firms have signed up to use E-Crossnet. That group includes BGI, MLMAM, Morgan Grenfell Asset Management, Deutsche Asset Management, JP Morgan Investment Management and Prudential Portfolio Managers.

Register for Wall Street & Technology Newsletters
Video
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.