Virtual Event, Real Progress

Dear Tony, for the first time, the FIX EMEA Trading Conference will take place virtually. What are your expectations?
In the past years, we’ve always had very good conversations at this event, and we hope to connect with the same audience, albeit only virtually. Usually, the event took place in March, so it was a good opportunity to look back on the previous year and provide clients with an outlook on upcoming projects planned for the year – but the fact that it now takes place in September doesn’t mean we won’t have enough conversation topics, on the contrary.

Can you tell us more? Which are the topics you’d like to discuss at FIX EMEA?
There are of course our own initiatives we’d like to provide our existing and potential clients more details on. Most recently, we’ve successfully expanded our microwave network, as the new route between London and Stockholm has gone live. In July we enhanced and broadened our offering in two trading segments, Structured Products and Equities, with our new “Price Validation Market Model” (PVM) and “Trading-At-Last” (TAL), a new continuous trading session immediately following the closing auction, where orders can be executed at the official closing price.

What are the benefits of these new services?
Microwave technology enables the fastest transmission of market data between trading centres. Our trading participants can identify price movements and implement investment decisions as quickly as possible. As a result, risks can be managed more efficiently. It also improves liquidity and tightens spreads, which results in better execution for everybody trading Swiss securities on the Swiss Stock Exchange.

With PVM for Structured Products orders and quotes are not immediately executed anymore but trading is interrupted briefly enabling market makers, liquidity providers and clients to validate their order or quote price, resulting in superior pricing and lower spreads. TAL provides participants with the opportunity to find additional liquidity at the end of the trading day without signaling any unexecuted positions to the market. The overarching goal of these improvements is to attract more trading over the Exchange – or OTE for short – because we are convinced that a stock exchange is able to better facilitate liquidity, provide transparency and maintain the current market price.

And which topics have you researched for your clients recently?
In a new series of articles, the “Trading InfoSnacks”, our Equities experts publish in-depth analysis to answer a variety of questions. For example: how has the surge in trading activity across Europe in H1 2020 manifested itself differently across venues in terms of the impact on liquidity, spreads and depth? What role have short-selling bans played? Was matching technology a factor in the way liquidity shaped in Europe? Which changes regarding prices and volumes occur as the closing auction session progresses? How does the balance of buy and sell orders participating in the closing uncross develop? Which is the key determinant of an auction imbalance? And what does it all mean for the overall efficiency of trading at the close?... These are just a few of the captivating topics which we’d be happy to discuss.

How about topics around market structure and regulation?
On that level, I would expect questions around our takeover of BME, the Spanish infrastructure group. After all, creating the third largest European financial market infrastructure group, and the 10th largest globally by revenue, doesn’t go unnoticed. And while the equivalence between Switzerland and the EU continues to be discussed, a mutual arrangement between Switzerland and the UK might be reached faster, which could result in Swiss equities also being traded on London-based MTFs again.

Are you ready for such a scenario?
We have always said we welcome competition, and just because our market share so far this year stands at 99.9% doesn’t mean we’ve stopped developing new initiatives. Besides the new features I’ve already mentioned, we’re currently working on the introduction – still in 2020 – of a new Quote on Demand (QOD) trading service for ETFs as well as extend our hugely successful SwissAtMid trading service from Equities to Investment Funds. And we continue to upgrade our microwave route between Zurich and London to ensure our clients enjoy the lowest possible latency.

Dear Tony, thank you for the interview.

Visit the virtual booth of the Swiss Stock Exchange at the FIX EMEA Trading Conference (accessible to registered attendees). The full agenda is available on the event page, with a special mention of the webinar (available on demand during the event) on the trade flagging data standard MMT with the participation of Marc Berthoud, Head Exchange Data Strategy at the Swiss Stock Exchange.