“We Address the Liquidity Shortage with Pragmatic Innovation.”

In the video interview below, Adam Matuszewski, Head of Equity Products and Analytics at SIX Swiss Exchange, comments on key talking points of the recent TradeTech Europe conference. One of them was liquidity shortage in Europe, where Adam points out how different forms of fragmentation constrain market participants from accessing liquidity.

Adams also elaborates how the Swiss stock exchange tackles this problem with pragmatic innovation that builds on existing solutions such as Conditional Orders for its non-displayed pool SwissAtMid and its upcoming new hidden order type AVD (Auction Volume Discovery), developed to stitch capped liquidity in together during auction phases.

Looking at the Bigger Picture

Furthermore, Adam discusses recent liquidity trends in lit European Markets and points out the relevance of providing research and analytics that provide insights beyond simplistic views. In this context, he mentions SIX Swiss Exchange’s latest Trading InfoSnack that highlights how order cancellations influence the EBBO Presence of MTFs and Primary Exchanges – and what that means for trading on the respective markets.

The interview was recorded during TradeTech Europe 2023, where the experts of SIX Swiss Exchange were present to discuss the latest trends with the 1,200 attendees. Details about AVD are also available in our factsheet, while practical examples are discribed in a video. The new functionality scheduled to be introduced with the SWXess Maintenance Release 11 (SMR11) on 15 May 2023 was developed in close collaboration with both the buy-side and the sell-side.

Furthermore, Simon McQuoid-Mason, Head of Equity Products UK & Ireland at SIX Swiss Exchange, joined the Liquidity Keynote Panel at TradeTech to discuss how to overcome the liquidity shortage and what tools could be used to automate and consolidate access to untapped liquidity – highlighting how AVD supports exactly that: helping participants to safely find liquidity over and above auction participation caps, without revealing their hand to the market.

Growth in SwissAtMid and Conditional Orders

Simon also pointed out that in 2022, SwissAtMid was the largest pool of liquidity among non-displayed and periodic auction venues in Swiss equities with a market share of 28.4%, over 10 percentage points more than the second largest venue. Since launch, more than CHF 350 bn have been traded in SwissAtMid and last month, a new record was set by the Block Solution for SwissAtMid, with over CHF 560 million executed in conditional orders. The Block orders allow participants to manage fragmentation and execute large blocks more efficiently and make interacting with unique liquidity in SwissAtMid more attractive. 

Trading InfoSnacks: High-Quality Research

To support clients and other stakeholder in successfully operating in today’s complex markets, SIX Swiss Exchange regularly publishes its Trading InfoSnacks – a series of research papers that feature unique analysis and insights. Discover the latest edition on Order Cancellation Patterns and all previous articles. 

• “The Search for Block Liquidity Continues.”
• “Conditional Orders Help our Clients to Navigate Fragmented Markets.”
• “We See Growth Every Single Month.”
• Sizing Up: SwissAtMid Block Orders