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Trading platform Aquis sees earnings boost from EU share price feed plans
Global Banking & Finance Review®
Company
By Huw Jones
LONDON (Reuters) – Aquis Stock Exchange said on Thursday that EU plans to provide data on share transactions across multiple trading platforms in the European Union will boost its earnings.
The EU is finalising rules to set up consolidated records of share transactions – known as “consolidated tapes” – across the region’s many trading platforms.
The aim is to offer an aggregated feed of share prices for investors to spot the best deals in a fragmented trading environment.
This will include Aquis, which opened a hub in Paris to serve EU customers and avoid disruption from Britain’s financial services being largely cut off from the bloc due to Brexit.
Aquis currently does not charge for data such as share prices, but once the company contributes to the consolidated share price feed this will bring in revenues.
“We don’t charge our members at all for any data, that’s why with any consolidated tape we are disproportionately advantaged,” Aquis CEO Alasdair Haynes told Reuters on Thursday, when the company reported interim results. “It’s a matter of when rather than if a tape comes in.”
Haynes said even a very low level of revenue from contributing data to a tape would be a material amount of money for Aquis.
The exchange will not be part of a group of European bourses such as Euronext and Deutsche Boerse, which have set up a company to tender for EU permission to operate a stock tape, Haynes said.
Separately, Aquis is ending its eight-year self-imposed ban on high-frequency traders (HFT), who dart in and out of markets to exploit tiny differences in prices, from accessing its market.
Haynes, a City of London veteran who founded Aquis a decade ago, said the ban had crimped Aquis’ ability to build up market share, and that in the medium term lifting it would have a “very significant impact on market share”.
Aquis’ members will be able to choose if they want to interact with HFT firms, also known as prop traders, from the fourth quarter of this year, subject to regulatory approval.
Aquis, still a minnow compared with domestic rival London Stock Exchange Group, reported net revenue up 17% to 9.7 million pounds ($11.92 million) in the six months to June 30. Profit before tax rose 64% to 1.1 million pounds.
($1 = 0.8141 pounds)
(Reporting by Huw Jones. Editing by Jane Merriman)
A trading platform is software that allows investors to buy and sell financial securities, such as stocks and bonds, through a broker or financial institution.
Brexit refers to the United Kingdom's decision to leave the European Union, which has significant implications for trade, regulations, and financial services.
High-frequency trading (HFT) is a form of algorithmic trading that uses powerful computers to execute a large number of orders at extremely high speeds.
Consolidated tapes are systems that provide a comprehensive, real-time feed of market data, including prices and transaction volumes, from multiple trading venues.
The London Stock Exchange (LSE) is one of the largest and oldest stock exchanges in the world, facilitating the buying and selling of shares and securities.
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