The London Stock Exchange has announced its key technology partners as it gears up to roll out a "dark pool" trading system across Europe.
The Baikal trading system is strategically important to the London Stock Exchange, as it fights growing competition from established exchanges, including Deutsche Borse and new trading platforms including BATS, Turqouise and Chi-X.
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"Dark pool" exchanges, such as Baikal, are becoming increasingly popular among institutional shareholders. They allow traders to execute shares without displaying the pre-trade prices to rivals, unlike traditional "lit" markets.
Fidessa, an independent provider of global trading systems, will develop order management and smart order routing technology for Baikal, the London Stock Exchange announced. Other partners include QuantHouse and BNP Paribas Securities.
"The combination of these technology and service providers together with the London Stock Exchange Group's in-house capabilities and order book technology will establish Baikal at the leading edge of exchange technology," said John Wilson, CEO of Baikal.
Baikal plans to launch a smart ordering capability across Europe first. The Baikal non-display order book will be launched later in the year, using the LSE's TradElect platform.
Baikal will use the Smarts surveillance system, already used to monitor the London Stock Exchange markets, to monitor real-time activity on Baikal.
The exchange will use the QuantFeed platform, provided by QuantHouse, for sourcing market data.
BNP Paribas Securities will provide back-end clearing services through the London Stock Exchange's Italian clearing house and alternative venues.