Cboe Europe, the largest pan-European stock exchange and a division of Cboe Global Markets, Inc. (Cboe: CBOE) is excited to unveil the upcoming launch of its groundbreaking trading service, Cboe BIDS VWAP-X. Scheduled to commence on October 21, pending regulatory approvals, this pioneering service will enable participants to source and match liquidity at a forward benchmark price, enhancing execution outcomes for end investors.
Broad Support from Industry Leaders
Cboe BIDS VWAP-X has garnered early support from a distinguished group of market participants, including Bernstein, BNP Paribas, BMO Capital Markets, Instinet Europe, Jefferies, KCx, and Virtu Financial. These key players have endorsed the new service, recognising its potential to transform trading practices in the European equities market.
Natan Tiefenbrun, President of North American and European Equities at Cboe Global Markets, stated, We are excited to welcome a diverse and prominent group of early adopters for Cboe BIDS VWAP-X. Their support underscores the strong demand for a forward-thinking, exchange-regulated crossing platform that enhances the execution of volume at an interval-based price. The positive response highlights our commitment to meeting the needs of our participants by providing an exchange-regulated crossing platform designed to execute volume at an interval-based price. This first-of-its-kind service is set to enhance execution outcomes and drive innovation in the European equities market.
Enhancing Benchmark Performance
Eric Stockland, Co-Head of Global Electronic Trading at BMO Capital Markets, highlighted the significance of the new service, stating, “Trajectory crossing in EMEA is a major development for institutional investors. It helps minimise tracking error to benchmark performance and mitigates adverse selection risks associated with other multilateral trading facilities (MTFs) and liquidity pools.”
Brian Gallagher, Head of Equity Execution at BNP Paribas, expressed support for the initiative: “We embrace innovation in the European market, especially when it enhances liquidity access and enriches our clients’ execution experience.”
Innovative Approach to Equity Market Structure
Salvador Rodriguez, EMEA Head of Global Execution Services at Instinet Europe Limited, noted, “Benchmark Crossing represents an encouraging innovation in Equity Market Structure in EMEA. It improves the ability of algorithms to find high-quality counterpart liquidity, balancing simplicity with advanced control features based on client requirements.”
Ben Springett, Head of Electronic and Program Trading, EMEA at Jefferies, remarked, Jefferies is enthusiastic about this new innovation, as it creates additional liquidity opportunities for our clients. VWAP crossing mechanisms can unlock liquidity that might not be available on other venues, proving beneficial for algorithm performance across various benchmarks.”
A New Standard for European Equities
Chris McConville, Global Head of Execution Services and Trading at KCx, commented, KCx is pleased to see this innovative development in the European market. Trajectory crossing represents a positive disruption, potentially offering additional liquidity for our clients. James Osborne, Global Head of Algorithmic Development at Virtu Financial, emphasised, “Trajectory crossing is a valuable feature for VWAP algorithms and can enhance many trading algorithms when used with target benchmarks. We look forward to extending the benefits of this mechanism to our European algorithms with the launch of Cboe BIDS VWAP-X.”
Service Details and Accessibility
Cboe BIDS VWAP-X will operate as a first-of-its-kind, exchange-operated trajectory crossing service for European equities, leveraging Cboe BIDS Europe’s established block trading platform. The service will enable participants to submit conditional VWAP indications of interest (IOIs), with trades reported as off-book, on-exchange executions in real-time, and centrally cleared through Cboe Europe’s interoperable clearing model.
At launch, the service will be accessible via FIX connectivity, with customer testing already underway ahead of the planned October 21 launch, subject to regulatory approvals.
