LSE, Lehman to set up `off-market' European trading platform
26 Jun 2008
Mumbai: The London Stock Exchange along with Lehman Brothers will set up a pan-European, off-bourse, trading platform to fend off start-up rivals from eating into LSE's business, the groups said.
The joint venture, called Baikal, would offer access to securities across 14 European countries in a `dark liquidity' online trading pool.
Dark liquidity pools are off-market trading networks where large orders can be executed anonymously. While off-market trading has always existed, technology now exists to bring investors together electronically in anonymity. Dark liquidity currently accounts for around €12 billion, or nearly $19 billion, in daily trading value on European bourses.
"Baikal aims to address the growing complexity of order execution by allowing participants to trade larger orders in a trusted environment, thereby minimising market impact, the groups said.
The joint venture, that aims to regain LSE's leading role in the region, will start operation in the first quarter of 2009 and LSE chief executive Clara Furse will head the business.
The LSE move follows the `Project Turquoise', an alternative European cash equities trading platform set up by a group of big investment banks, which would go live on 18 August.
NYSE Euronext said on Tuesday it bought 25 per cent of the Doha Securities Market for $250 million to boost its presence in the booming emerging markets.