November 6, 2013

UK regulators have approved a licence for Aquis Exchange, a new pan-European share trading platform that aims to shake up share trading in the region by offering a subscription-based pricing model based on mobile phone tariffs.

Aquis confirmed on Monday that the Financial Conduct Authority had granted the London-based group a licence to trade as a multilateral trading facility, a legal designation that allows it to trade shares in Europe but stops short of a full exchange licence. The group was founded a year ago by some of the executives that built Chi-X Europe into the region’s largest stock exchange.

Alasdair Haynes, the former Chi-X Europe chief executive who founded Aquis, said: “We can now forge ahead with the introduction of subscription pricing to the European cash equities market.”

The group is aiming to break into what is largely a duopoly in European cash equities trading, between the local incumbent national exchange and BATS Chi-X Europe. European legislation passed five years ago introduced competition into the market but a host of other alternative trading venues have closed or merged with larger rivals as they struggled for profitability amid a fierce price war and soft markets. In contrast to US markets, European venues are not required to route investors’ orders to the venue offering the best price. The responsibility to demonstrate so-called “best execution” is the responsibility of the broker.

The Warsaw Stock Exchange has taken a 30 per cent stake in Aquis while a number of wealthy private investors around the world have taken small stakes. Users will be charged according to the message traffic they generate, rather than a percentage of the value of each stock that they trade.

Philip Stafford