Tradepoint Financial Networks and the SWX Swiss Exchange are joining forces in a move that will migrate all trading of Swiss blue-chip stocks from the SWX to Tradepoint.
The new alliance should be completed during the third quarter and, according to Steve Wilson, director of business development for Tradepoint, will be fully operational by the end of the first quarter next year. As part of the deal, Tradepoint will be renamed virt-x and will have exclusive rights to use SWX's EBS trading platform. "The EBS system has been engineered for much higher volumes, and with the launch of our pan-European market and the addition of all the trading in Swiss blue-chips, we needed to get to the next level of technology to support that," says Wilson.
Wilson adds that the EBS system is a standard public limit order book that has market-making functionality and sophisticated market surveillance functions, such as managing trading halts.
The deal gives Tradepoint a major boost in liquidity, while giving the Swiss blue chips pan-European exposure through the virt-x network. With the combination of the Paris, Brussels and Amsterdam exchanges to form Euronext, and the proposed union of the Frankfurt and London exchanges to form iX, virt-x seems to be joining a popular European trend-the quest for higher liquidity through alliances.
"At the moment, there is no competition, because we are the only ones who have actually been able to bring a pan-European equity market to fruition-now how iX and Euronext actually pan out, I don't know," says Wilson.
A spokesman for Euronext, however, says it is the first combination to actually make things work. The spokesman says the merger of the three exchanges to form Euronext, which was announced in March, should definitely be completed by October. "On Tradepoint, we take them seriously and we watch them closely but, of course, Tradepoint has made announcements before. It's very easy to announce deals, it's very difficult to work out deals," he adds.
The spokesman for Euronext also says, "I know that LIFFE The London International Financial Futures and Options Exchange is considering joining Euronext, but first we will have to close our deal merging Euronext, then afterwards other partners can join in."
Referring to the trend of European-exchange consolidation continuing, Wilson says, "Everyone's talking to everybody."