Our privacy policy describes how Fidessa uses cookies on our website. If you continue using our website, you are consenting to our use of cookies. OK

MTF NEUROsis

NASDAQ OMX confirmed this week that it will close NEURO, its London based MTF, at the end of next month. Given that it was backed by the mighty NASDAQ OMX why did it fail and is this the end of the MTF model as we know it?

It didn’t help that NEURO launched at the height (depth) of the credit crisis, but it always seemed to struggle to develop a real identity of its own. Chi-X was first and Turquoise had a bunch of investment banks priming it with liquidity whilst BATS has always picked its fights carefully and punched effectively above its weight. So what’s next?

Fragmentation continues on the same trajectory – upwards – and, it seems, is spreading to new areas too. On this point, I was at an event organised by Goodacre and APCIMS on Monday where Citadel’s Matteo Cassina and Equiduct’s Peter Randall were extolling the virtues of their MTF in the RSP space. This struck me as a good example of what it’s all about. Equiduct enables Citadel to bring its very efficient market making to bear on retail order flow. This narrows spreads which is good for best execution but challenges the existing RSP market makers.

The same is true for the mainstream MTFs as they enabled other HFT market makers to step to the front of the queue for institutional flow in a very similar way. Sadly NEURO seemed unable to attract these sorts of players and so was unable to build enough momentum to gatecrash the fragmentation party.

Anyway, I know that NEURO’s CEO Charlotte Crosswell and her team are both talented and dedicated so I’m sure they will make their presence felt as the liquidity war intensifies.

Leave a comment

Copyright © 2018 Fidessa Group Holdings Limited. All rights reserved.

The information contained within this website is provided for informational purposes only. Fidessa will use reasonable care to ensure that information is accurate at the time it is made available, and for the duration that it remains on the site. The information may be changed by Fidessa at any time without notice. We also reserve the right to close the website at any time. No representation or warranty, expressed or implied, is given on behalf of Fidessa or any of its respective directors, employees, agents, or advisers as to the accuracy or completeness of the information or opinions contained herein or its suitability for any purpose and, save in the case of fraud, all liability for direct, indirect, special, consequential or other loss or damages of whatever kind that may arise from use of the website is hereby excluded to the fullest extent permitted by law. Any decisions you make based on the information in this website are your sole responsibility and information on the website should not be relied upon in connection with any investment decision.

The copyright of this website belongs to Fidessa. All other intellectual property rights are reserved.

Fragulator® is a registered trademark of Fidessa Group Holdings Limited.

Reproduction or redistribution of this information is prohibited except with written permission from Fidessa.