SuperMontage Europe allows both brokers and market makers to display their trading interest on an order book system, resulting in increased liquidity and transparency as competition to make the best prices in the market increases.
SuperMontage Europe enhances the European Trading System (ETS), a quote-driven market which was introduced to NASDAQ Europe in June 2001. SuperMontage Europe is being launched in tandem with SuperMontage in the US which goes live on 14 October.
Commenting on the launch, Mike Sanderson, Chief Executive Officer of NASDAQ Europe said: "The introduction of SuperMontage Europe is a win for investors as they will benefit from the best price available on a deeper and more transparent market. It is also a win for traders who will be more confident that they are meeting their best execution responsibilities. This leading edge offers huge benefits to all our market participants."
All current and future instruments, either in the listed or traded segment, will be traded on SuperMontage Europe. Any newly listed Exchange Traded Funds (ETFs) or Initial Public Offerings (IPOs) will also be eligible for trading.
Technology and operational details
SuperMontage Europe will allow brokers and market makers to enter into order routing relationships that provide investors with best execution up to a certain size, with the possibility of price improvement. When determining "best execution" for a given stock NASDAQ Europe selects the best price available on the NASDAQ Europe book and a liquid reference market for the security.
Under the current system, professional and individual investors see only a market participant's best buy and sell quote in each security. In SuperMontage Europe, market makers can input all or part of the buy or sell interest, by name or anonymously. This means that more buyers' and sellers' orders can be displayed and investors will be able to see more of the orders available to them.
This should give traders a higher level of confidence that they can achieve their best execution responsibilities since there will be more liquidity available on a single trading platform.
Summarising the benefits of SuperMontage Europe compared to other European exchanges, the new platform:
- Links to multiple central securities depositories (CSDs). This means low-cost, flexible clearing and settlement for cross-border trades
- Price-Internalisation-Time order execution algorithms maximise the accounts firms can internalise on the book
- Ability to screen out trades that do not require settlement (such as internal trades).
