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With implementation of the new Markets in Financial Instruments Directive (MiFID) just one month away, the new internal matching service offered by Euronext has already attracted almost 50 Euronext originating member firms accounting for more than 70% of all trades carried out on NYSE Euronext European equity markets. This new service enables clients to optimise order flow by giving priority status to matching their buy and sell orders in the central order book. This means that each client gets the upside of order internalisation – reduced execution costs – with no IT development required and no obligation to become a Systematic Internaliser.1
Approved by the College of Euronext Regulators and available from November 1, 2007, this new service has won over originating member firms of all sizes and from all locations.
For these firms, internal matching eliminates the cost of clearing internal trades, which can represent up to 40% of total transaction costs.
In designing its order matching service, Euronext has developed a new trading algorithm to optimise order execution on equity markets. Buy and sell orders originated by the same member firm subscribing to this service will be executed “at the best price” in Euronext’s central order book – and with the level of security and transparency offered by a regulated market. Orders may be settled directly by the firm that originated them.
“The Markets in Financial Instruments Directive will be coming into force on November 1. In this constantly changing environment, Euronext has demonstrated its unwavering responsiveness to clients and its commitment to innovation by introducing a new range of services, the first of which is our internal matching offer,” said Marianne Demarchi, Executive Director in charge of Marketing and Business Development, European Cash Markets, at NYSE Euronext. “Thanks to this new service, member firms will be reaping the benefits of order internalisation; investors will continue to benefit from the same top-quality execution as before thanks to the enhancement of market liquidity generated by this new service.”
1 A Systematic Internaliser is an investment firm which, on an organised, frequent and systematic basis, deals on its own account by executing client orders outside a regulated market or an MTF.
