SIX Swiss Exchange introduces a new Block Order trading solution, providing enhanced access to its unique liquidity in Swiss equities.
Fragmentation in the European equity trading landscape has complicated accessing liquidity – in particular for the execution of large blocks. Common practices such as sending large orders simultaneously to multiple sources of liquidity contain the risk of dual or overfill, while sequential routing of smaller segments of a large order to different venues might result in negative price impact. These risks can be managed with Conditional orders – which are now also available on SIX Swiss Exchange.
Simon McQuoid-Mason, Head Equity Strategy at SIX Swiss Exchange, comments:
“We embrace the competition for volumes and market share in Swiss equities, both in the lit and in the dark. With our new Block orders, we can match the functionality of competing venues – with the added benefit of offering interaction with existing liquidity in SwissAtMid.
A meaningful segment of this liquidity is unique to our non-displayed pool, which means it is not available for interaction with on any other dark conditional venue. This combined with latency efficiencies embedded within our solution design, means our solution offers market participants benefits to finding and securing block liquidity that they won’t find on other venues.”
The new Block order type available in SwissAtMid comes in two variants: indicative (conditional) and binding (firm), with order entry and executions required to be at or above a Minimum Block Order Value Threshold (Large In Scale) that is pre-defined per security. Conditional orders enable counterparties, either on one or both sides of a match, to ‘firm up’ prior to trade execution, which mitigates their risk of overfill when working a large block order.
Christian Reuss, Head SIX Swiss Exchange, comments:
“We always strive to innovate and improve trading on our market. Our new Block orders bring additional USPs for our trading participants – all of which incentivise true block liquidity.”
SwissAtMid has just celebrated its fifth anniversary. The Swiss stock exchange’s own non-displayed pool has established itself as the main source of block liquidity in Swiss shares and delivered over CHF100 million in price improvement value to market participants.
Dimitris Mavroudis, ETF/ETP & Fund Product Manager at SIX Swiss Exchange, comments:
“With the extension of Quote on Demand to the trading interface OTI and the introduction of ‘Delayed Publication’ for large trades we have taken important measures for the further growth of our ETF and ETP segments.”