Alternative to Over the Counter trading and designed to meet MiFID II requirements. Available June 7, 2017, on all Nasdaq Nordic Exchanges.
Nasdaq (Nasdaq: NDAQ) announced today that it will launch an innovative new market feature, Auction on Demand, on June 7, 2017. This service is designed to fulfill MIFID II transparency requirements for the periodic auction trading model, while offering Nasdaq’s trading clients a regulated and highly advanced alternative to Over the Counter and darkpool trading.
Currently, only half of equity trading across Europe is carried on “lit” order books, which allows all traders to see the amount of liquidity posted on each bid and offer. After the implementation of MiFID II regulations in 2018, the majority of equity trading will be required to take place on lit markets.
“Auction on Demand provides a new way of executing large orders, without disrupting the market, in a regulated and transparent trading environment, making Nasdaq Nordic an even more secure and liquid marketplace,” said Henrik Husman, VP of Cash Equities at Nasdaq.
Developed with professional investors in mind, Auction on Demand addresses a broad range of execution challenges for larger orders, runs in parallel to Nasdaq Nordic’s lit order books, and is triggered on-demand.
In the Auction on Demand order book, a seller or buyer may place an order at any time, entering it into a periodic auction. When a matching bid or offer comes in, an auction uncross is triggered, and price and volume are made public. Auctions on Demand take place throughout the day when the lit book is in continuous trading and is triggered on demand, when there are orders that can match.
Auction on Demand is designed to fulfill both MiFID I and MiFID II transparency rules, and offers multiple features to ensure open yet unobtrusive trading. The service comes with a number of safety features, including randomization and minimum execution size.
Testing will begin March 20, 2017, and Auction on Demand will be launched on June 7, 2017. It will be available for all members trading shares on the main markets of Stockholm, Copenhagen, Helsinki and Iceland, via all order entry protocols, and during regular trading hours.
With Auction on Demand, Nasdaq has aimed to incorporate its world leading technology and market knowledge into a service that will help market participants execute both large and small orders in accordance with the new MiFID II regulations.
Nasdaq (Nasdaq: NDAQ) is a leading provider of trading, clearing, exchange technology, listing, information and public company services across six continents. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital markets. As the creator of the world's first electronic stock market, its technology powers more than 70 marketplaces in 50 countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to more than 3,700 listed companies with a market value of $10.0 trillion and approximately 18,000 corporate clients.
Nasdaq Copenhagen, Nasdaq Helsinki, Nasdaq Iceland, Nasdaq Riga, Nasdaq Stockholm, Nasdaq Tallinn, Nasdaq Vilnius, Nasdaq Clearing and Nasdaq Broker Services are respectively brand names for the regulated markets of Nasdaq Copenhagen A/S, Nasdaq Helsinki Ltd., Nasdaq Iceland hf., Nasdaq Riga, AS, Nasdaq Stockholm AB, Nasdaq Tallinn AS, AB Nasdaq Vilnius, Nasdaq Clearing AB and Nasdaq Broker Services AB. Nasdaq Nordic represents the common offering by Nasdaq Copenhagen, Nasdaq Helsinki, Nasdaq Iceland and Nasdaq Stockholm. Nasdaq Baltic represents the common offering by Nasdaq Tallinn, Nasdaq Riga and Nasdaq Vilnius.