SIX Swiss Exchange and Liquidnet announced the launch of a new platform for non-displayed equity block trading, which they say will pave the way for a new and more efficient way to source and trade block liquidity in Europe.
The launch will make available approximately 3,000 equities in five European equities markets: Switzerland, UK, France, Germany and the Netherlands, with more equities markets planned to be added over time.
The platform allows SIX Swiss Exchange members and Liquidnet's buy side members to execute large block trades via this new liquidity source. Both SIX Swiss Exchange's and Liquidnet's members will gain access to the Swiss institutional liquidity, as well as similar liquidity in the other four markets.
The new arrangement creates a new market structure that combines the latent liquidity in SIX Swiss Exchange with the block liquidity in the institutional market, creating greater efficiency for institutional trading while also providing liquidity and price improvement to both Liquidnet Members and members of SIX Swiss Exchange, SIX and Liquidnet said in a release.
Through the Six Swiss Exchange Liquidnet Service (SLS), SIX Swiss Exchange members will be able to direct executable block orders to Liquidnet. These orders will be immediately executable mid-point-only indications, typically delivering between 5 and 70 bps of direct price improvement, before any additional savings made by avoiding market impact costs, SIX and Liquidnet said.
Christian Katz, CEO of SIX Swiss Exchange, commented: "Having access to this additional liquidity will simplify and accelerate SIX Swiss Exchange members" trading activities. Our constantly growing family of exchange members will be able to provide improved investment returns by simply adopting a strategy of directing more order flow to this block trading pool. This cooperation further establishes SIX Swiss Exchange as the independent investment network of choice for its members, linking all its members to the global active investor community."
John Barker, managing director of Liquidnet Europe, said: "Liquidnet was built to provide institutional investors with access to liquidity they need and the ability to trade in the size they want. This opportunity with SIX Swiss Exchange offers to our clients and institutional investors - who manage more than $12.5 trillion in assets - to invest more safely and efficiently in Swiss and other European stocks. This is an important first step for Liquidnet, not only bringing increased executable liquidity to our Members globally, but underlining Liquidnet's vision of a new market structure - one that properly serves the differing needs of institutional investors through creating a unique wholesale market."