Swiss exchange seeks to lure high-frequency traders
Switzerland’s stock exchange has launched a trading platform that will use technology supplied by two of the group's biggest European peers to lure high-frequency algorithmic traders, as exchanges look for ways to fend off a slew of low-cost rivals that have eroded their market share.
SIX Swiss Exchange said today it had launched SWXess, a new market for share, bond and derivative trades that was built by transatlantic exchange groups Nasdaq OMX and NYSE Euronext.
The new platform is up to 100 times faster than its predecessor, which was built in-house, and can handle 20 times as many orders. A spokesman said SIX only develops its own products if it cannot find a solution externally.
The launch represents an effort to attract more algorithmic trading firms, which have been keen users of systems such as Chi-X Europe and Turquoise due to their high-speed technology and low trading costs.
Last week, Chi-X performed 6% of trades in Switzerland's most liquid stocks, while Turquoise had a market share of 2.2%, according to financial software firm Fidessa. Nevertheless, SIX remained dominant, performing 91% of all transactions.
“In today's increasingly competitive exchange industry, high-end technology is a key differentiator in order to continue to grow volumes and introduce new and innovative products,” said SIX chief executive Christoph Bigger.
Other European exchanges have announced their own measures to address the threat posed by alternative equity markets in recent weeks. Deutsche Börse last week announced plans for a new pan-European platform, while the London Stock Exchange is working with Fidessa to build a European dark pool, and NYSE Euronext launched a pan-European trading system last month.
-- Write to Tom Fairless at tfairless@efinancialnews.com
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