Financial News: Aquis wins UK regulatory approval

November 4, 2013

Aquis Exchange, the pan-European trading venue founded by industry veteran and former Chi-X Europe chief executive Alasdair Haynes, has secured approval from UK regulators, marking a major milestone towards its proposed launch.

Aquis said in a statement it had received approval from the UK’s Financial Conduct Authority to begin operations as a multilateral trading facility. It will hold a dress rehearsal for prospective members on November 9, with a launch date to be announced in due course, the statement read.

In the statement, Haynes said: “We can now forge ahead with the introduction of subscription pricing to the European cash equities market.”

Haynes announced the launch of Aquis in October 2012 last year, proclaiming it would help to break the “duopoly” in European equities trading created by the merger of Europe’s two major pan-European players, Chi-X Europe and Bats Europe, nearly two years ago.

The deal made the merged Bats Chi-X Europe entity the dominant player with around a 25% market share of pan-European trading. Between 80% and 90% of on-exchange trading in the major national indices – including Germany, Spain, France and Belgium – is split between Bats and the local incumbent exchange.

Aquis will attempt to challenge the venue by offering trading in European equities with a novel fixed-fee subscription model commonly adopted by mobile phone companies.

Users will be charged based on the message traffic they send to the venue, such as buy and sell orders or cancellations. Aquis is planning to charge between £2,500 and £10,000 a month in its first six months of operation.

The exchange has been seeking external investment in recent months and secured the backing of the Warsaw Stock Exchange as a strategic investor in August. The Polish bourse took a 30% stake for around £5 million.

Meanwhile, former Barclays chief executive Bob Diamond and the former chief executive of Barclays’ corporate and investment bank Rich Ricci are among several high-net-worth individuals that have been linked with supporting the venue.

Haynes left Chi-X Europe in January 2012 after it was acquired by Bats. He was previously chief executive of ITG International, the agency broker.

 Tim Cave