Moscow Exchange Changes Parameters of FX Iceberg Orders

Iceberg orders execute a large volume order into smaller disclosed orders.

Moscow Exchange (MOEX), Russia’s largest institutional trading venue, today announced a package of changes designed to better manage iceberg orders for FX spot transactions, which executes a large volume order into smaller disclosed amounts.

The MOEX has reduced the required minimum displayed amount of an iceberg order to 1,000 lots from the previously applied 5,000 lots, effective May 22, 2017. The reduced order book transparency associated with iceberg orders aims to boost liquidity on big lots, the exchange said.

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The iceberg order is a large single order that has been divided into smaller lots for the purpose of hiding the actual order quantity. This allows traders to simultaneously hide a large portion of their order size and signal their interest in trading to the market.

In terms of MOEX parameters, the trader will be required to publicly display only the specified portion, 1,000 lots or 1 million US dollars/euro/yuan etc., instead of the full order quantity which could amount to 100,000 lots or 100 million units of relevant currency.

Last week Moscow Exchange reported its financial results, which saw an operating income of $164.4 million (RUB 9.46 billion) in Q1 2017, lower by 19.4 percent year-over-year from $204.0 million (RUB 11.74 billion) in Q1 2016. On a quarterly basis, the decline was much less pronounced, falling by only 7.5 percent quarter-over-quarter from $177.8 million (RUB 10.24 billion) in Q4 2016.

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