NYSE Euronext announced the launch of a Retail Matching Facility (RMF) on its European regulated cash markets, a new service which enables Retail Liquidity Providers to offer price improvements to retail investors. This initiative, which meets all pre- and post-trade MiFID requirements, will be available as of mid- January 2013.
NYSE Euronext member banks and brokers² can execute their retail order flow via the Retail Matching Facility (RMF) against new price improving liquidity provided by Retail Liquidity Providers. Furthermore, they will not be required to invest in new connections as they will be able to use their existing access to the European regulated cash markets. The liquidity providers will be required to be present at the European Best Bid and Offer spread 95% of the trading day.
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Alicia Suminski, Head of Market and Product Development, European Equity Cash and Derivatives, NYSE Euronext said “The aim of NYSE Euronext’s Retail Matching Facility is to promote a more competitive, transparent environment for retail investors than they currently achieve through bilateral, internal arrangements with intermediaries.”
Retail investors’ orders will be eligible to trade with both Retail Liquidity Providers, whose role will be to provide buy and sell quotes in the RMF, and NYSE Euronext’s central order book. The Retail Liquidity Providers will trade with the retail orders exclusively according to the ordinary price-time priority principle, in full competition with other Retail Liquidity Providers and the central order book itself. If the Retail Liquidity Providers’ quotes are not competitively placed then the retail investors’ orders will automatically trade with NYSE Euronext’s central order book thus preserving its order flow diversity. All RMF transactions are regulated market transactions and will be identified appropriately. Additionally, in order to be pre-trade transparent, Retail Liquidity Provider quotes will be broadcast.
The Retail Liquidity Programme is open to all eligible NYSE Euronext members, ensuring absolute neutrality, and is highly competitive thanks to a selection process.