The Trade: Aquis doubles market share after predatory HFT ban

March 1, 2016

Alasdair Haynes says response to controversial move to eradicate predatory behaviour has been overwhelming.

Aquis Exchange has revealed a significant increase in its market share, following its controversial decision to ban certain types of high-frequency trading (HFT) on its market.

In early February, the London-based exchange told The Trade is would introduce new member rules on 8 February to effectively ban predatory HFT behaviour from the venue.

At the time, Aquis CEO Alasdair Haynes admitted the move was high risk, but hope it would prompt improved liquidity in the long-term.

However, after just three weeks, Haynes said the strategy is already paying off and has seen it double its market share. On the day the change was introduced, Aquis had a market share of just 0.47%, but has seen this steadily rise over the past fortnight to over 1% today.

While it is still a small player in European trading, Haynes said it was proof Aquis has adopted a winning strategy.

“The response has been extremely encouraging,” he told The Trade, “we’re getting calls from new potential members and building momentum. We expected the market would welcome this move but didn’t expect to reach this level in such a short space of time. Other indicators of market health are also positive.”

Haynes added that liquidity at the touch on Aquis has also increased, doubling in some names, and the amount of time Aquis has the best price in the market has also increased. He said this is proof that getting rid of negative HFT behaviour can have positive effects for other users of the exchange.

“Our market makers are also very positive about the new membership rules, they’re putting up bigger sizes which they would not do if they were unhappy.”

Aquis launched in 2013 as a pan-European equities trading venue, offering a new subscription-based payment model. It has struggled to gain market share, which Haynes recently told The Trade was due to many major brokers focusing on venues that have historically held a large market share, rather than those offering better execution.