Neonet Adopts BATS Periodic Auction Book as Utility Goes Live

Market participants will gain access to 4,000 European stocks, with periodic auction phases determined by the liquidity characteristics.

Neonet, an independent agency broker and execution solutions provider, has gone live with its BATS Chi-X Europe (BATS) Periodic Auctions Book, according to a Neonet statement.

BATS Periodic Auctions Book is a new solution available for securities and markets via BATS’ existing lit books suite. Last month, BATS launched the creation of its Periodic Auctions Book that has since allowed market participants to access auction functionality throughout the trading day – the ultimate goal is to foster and incentivize trading in larger sizes or denominations. Despite the launch back on September 7th, trading has gone live only today.

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Market participants will now be afforded access to more than 4,000 European stocks, with the frequency of periodic auction phases determined by the liquidity characteristics of an individual stock. To help provide a tighter band of security around a given execution price range however, executions will only occur at or within the BATS EBBO collar.

Moreover, BATS will undergo a standard auction price calculation with a price, size, and time priority allocation of executions to elicit larger order sizes. Its auctions will occur over a predetermined duration, coupled with the advent of a random end with timings based on activity levels in each security. Commensurate with the launch, Neonet has become one of the first adopters of BATS Periodic Auctions Book.

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According to Tim Wildenberg, Chief Executive Officer of Neonet, in a recent statement on the launch, “In our mission to bring high quality, independent and transparent execution services to our clients we are keen to support new initiatives that have potential to improve the marketplace. BATS Periodic Auctions Book highlights the current trend of innovative initiatives to cater for a broader range of execution needs for professional investors trading larger orders.”

“As an agency execution broker we have a dedicated focus on best execution both today and in light of upcoming MiFID II regulation. Our recognised Smart Order Router, execution algorithm suite and TCA metrics, combined with a broad liquidity access, are the cornerstones of a successful best execution offering,” he reiterated.

“We are pleased to see Neonet as one of the early adopters of our new Periodic Auctions Book. The goal is to attract larger sized orders, on a latency-agnostic basis, at or within the BATS European Best Bid and Offer (EBBO) price range. Auctions will take place in each stock throughout the day, without impacting continuous trading in other BATS order books (known as ‘CXE’ and ‘BXE’) or across the broader European market,” added David Howson, Chief Operating Officer at BATS Chi-X Europe, in an accompanying statement.

Last week, BATS reported its volumes for the month ending September 2015, having orchestrated a steady rise across its US and European equities business. More specifically, the exchange inched higher with its volumes, which in September came in at 24.8% MoM from August 2015. In terms of its latest figures, BATS reported its trade reporting facility at $405.0 billion (€355.9 billion) during September 2015.

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