virt-x wrote to members on 2 November 2005 with a questionnaire on whether the closing auction for pan-European securities on virt-x should be removed and, if so, whether a trial period for such removal would be desirable. We would like to thank the members which responded.
Members representing more than 75% of virt-x’s order book business in pan- European securities expressed a preference for removal of the closing auction and 6% were opposed.
In view of the feedback received, virt-x proposes to carry out a trial removal, as follows:
- the trial removal will apply to pan-European order books only (not to SMI/Swiss securities or ETFs)
- during the trial, the pan-European order book securities will close at 17:30 CET unless a Stop trading occurs between 17:25:01 and 17:30:00. In the event of a Stop trading in that period, the security will close immediately following the 5 minute Stop Trading period and all matchable orders will be executed
- a test environment will be available for members with effect from today as set out in the attachment to this Market Notice
- the trial will commence on Monday 10 April 2006
- the trial will initially be set for 3 months but this may be extended or curtailed as appropriate during the trial period
- virt-x will monitor for increased risk of attempted market manipulation due to the removal of the 2 minute randomised closing period and we will halt or amend the trial at any time if we have concerns on this or any other regulatory implication arising from the trial
- during the trial, virt-x will seek members’ views on whether the permanent removal of the closing auction is desirable.
