Today, the District Court (Court) of The Hague forced Euronext to accept competition between exchanges, rejecting the demand of Euronext to block competition between exchanges. This is clear from the judgment of the Court in proceedings filed by Euronext against competitor TOM. The Court states that TOM is allowed to continue trading AEX options and may continue using ticker symbols for single stock equity options that are similar to the ticker symbols of Euronext. Furthermore, the court states that TOM needs to have its own product-introduction policy; in anticipation of this, TOM has already introduced its own policy as of 13 June 2014, including the creation of new strikes and maturities. The court has not prevented TOM from using the term Best Execution for marketing purposes, but has found that no guarantees can be made by using the term ‘always best price’.
TOM welcomes the decision of the Court with respect to public trading of AEX options. “This shows that AEX options are tradable on all exchanges and therefore competition is a fact between all option exchanges” said Willem Meijer, CEO of TOM. TOM was founded in 2009 and has since been fighting fiercely for more competition and lower fees for option trading, achieving significant results. Not only has TOM been able to gain a market share of 40-45% in Dutch option trading, competition also led to a reduction in Euronext’s option trading fees for retail investors to 31 eurocents. This represents an overall reduction in fees by 59%, attributable to competition introduced by TOM. In addition to showing that competition between exchanges is possible, these developments show that competition is also for the benefit of professional and private investors.
Euronext requested that the Court prohibits TOM from using similar ticker symbols as Euronext. On this point, TOM has been vindicated. The ticker symbols of TOM contain the same structure as the symbols of Euronext, only followed by a T. This is to facilitate professional and private investors to compare market prices on both exchanges. “That comparison of option prices on specific names remains possible, means that transparency of the option market is guaranteed” according to Willem Meijer, CEO of TOM.
