III.3.c. New Actors Are Arriving...
Regarding the stock exchanges industry, tomorrow's key issues
are represented by new alternative trading platforms (also known as
"darkpools") such as Turquoise, Chi-X and Bats Trading.
Recently, thanks to the amendment of the Markets in Financial
Instruments Directive (MiFID) and the developments of new technologies applied
to the finance, the competition between traditional and alternative trading
platforms has considerably increased. The main materialisations of this new
directive are the launches of new MTFs (Multi-Trading Facilities) as a serious
alternative to traditional stock exchanges such as the L.S.E, Deutsche Biirse
or Euronext.
One of these MTFs is the pan-European platform Turquoise,
created by 9 banks (Societe Generale, BNP Paribas, Citigroup, Goldman Sachs,
Merrill Lynch, Morgan
44
Article: NYSE Group and Tokyo Stock Exchange Enter Strategic
Alliance - Sign Letter of Intent for Mutual Cooperation and Development. Tokyo
Stock Exchange website
45
See Appendix: Article Agefi 28/05/2008, "La Bourse de Tel-Aviv
veut attirer les investisseurs français" (traduction: "The Tel-Aviv
Stock Exchange wants to attract French Investors")
Stanley, Deutsche Bank, UBS and Credit Suisse) and launched
in August 2008. At the time of its launch, the platform announced the goal to
gather 5% of European shares volumes before the end-2008 (vs. a mid-term 12%
market share) and predicted that traditional stock exchanges would pass below
the 50% market share46. Henceforth, on that platform are available
1,267 different company shares from 15 major European countries.
As regards Chi-X launched in 2007, this platform managed to
reach ahead of schedule its guidance, i.e. a gathering 15% market share in
volumes on the French CAC 40, on the German DAX 30 and on the Dutch AEX 25, and
in the meantime 20% market share in volumes on the British FTSE 100. Now,
Chi-X's management aim at expanding the activities to secondary European
countries such as Spain, Ireland, Greece and several Eastern European countries
like Slovakia. The contributions of these MTFs are principally the drop of
trading costs, but also a greater liquidity and efficiency, essential elements
for investors. Besides, according to a study of ITG Posit, "trading costs have
fallen by 43% in the United Kingdom since the development of dark pools". In
response to these new competitors, traditional operators are also developing
alternative trading facilities. Nasdaq OMX is going to launch the Nasdaq OMX
Europe, whereas the L.S.E (formerly in association with Lehman Brothers) is
going to launch Baikal47. In September 2008, Nyse Euronext launched
SmartPool for European blue chips.
Fragmentation of Exchanges in Europe (as of May 2009)
|
FTSE 100
|
DAX 30
|
CAC 40
|
AEX 25
|
SU 30
|
Average
|
Chi-X
|
18.6%
|
15.3%
|
16.5%
|
17.0%
|
6.3%
|
14.7%
|
Turquoise
|
5.7%
|
2.6%
|
3.4%
|
2.9%
|
2.9%
|
3.5%
|
Bats Trading
|
3.7%
|
3.6%
|
3.1%
|
2.9%
|
0.2%
|
2.7%
|
Traditional stock exchanges
|
71.8%
|
77.7%
|
76.3%
|
76.7%
|
90.7%
|
78.6%
|
|
Source: TAG
Concerning the foreign cross-listing, the question could be
the following: what is the relevance of keeping or doing cross-listings in
Europe, whereas anyhow the darkpools are proposing your shares to a large panel
of investors in several countries ? And how long before the creation of
alternative trading platforms at the European and North American scale, i.e.
the zone which concentrates most of foreign cross-listings ?
46 See Appendix: Article Les Echos 20/08/08. Eli
Lederman - General Director of Turquoise
47
As a consequence of the Lehman Brothers fall in September 2008,
L.S.E has announced continuing to develop the project
| 
