The London Stock Exchange (LSE) has published a Consultation Paper on the services that it plans to offer member firms to assist with their compliance with MiFID. The LSE plans key product initiatives in:
Pre trade transparency
The LSE plans to introduce market making in all liquid securities as defined by MiFID, covering SETS, SETSmm, EUROSETS and a new European Quoting Service (EQS). A “liquid security” is a share which is traded daily, with a free float not less than EUR 500m and has either more than 500 transactions a day or a daily turnover in excess of EUR 2m.
Limit order display
The LSE plans to provide a limit order display in all UK Main Market equities via existing SETS and SETSmm services and through the implementation of SETSqx, a new quote and periodic auction platform previously announced for fledgling and non index securities. SETSqx is due to be implemented in Q2 2007 with TradElect, as a replacement for the SEATS Plus trading service.
Post trade transparency
The LSE plans to provide a pan-European trade reporting service for the publication of all trade reports in EU Regulated Market (EURM) securities, including appropriate MiFID delays, whether executed on Exchange or OTC.
The LSE plans to provide a dedicated data service for all off book trade reports, in addition to sending reports down the existing individual market data feeds.
The LSE plans to provide two products. Firstly, an Execution Quality (EQ) product with data mining of all data reported to the Exchange. Secondly, a Proquote best execution product containing quote and trade data from other exchanges and RSPs.
The LSE’s existing “Exchange Reporting Service” will be available for firms who wish to have a low cost route for transaction reporting to the FSA and potentially other regulators in due course.