Nasdaq's new trading platform NLX is gearing up for launch in London. Sentiment is shifting in favour of the prospects for the MTF. This highlights the dilemma for ISVs and their role in the success of a new trading platform, argues William Mitting.
Six months ago you would have struggled to find anyone in
London who thought that NLX, the new London-based exchange from
Nasdaq OMX, would succeed.
The prevailing wisdom was the plan to launch six interest
rate contracts replicating the most liquid on Liffe and Eurex
was too simplistic, the margin efficiencies intangible and the
distraction of regulation and rising costs elsewhere too great
to guarantee the involvement from the banks and prop trading
firms that it needs for a successful launch.
Today all the talk in London is of NLX. After six months of
painstaking road-showing and collaboration with local
participants by Charlotte Crosswell and her team at NLX there
is a real buzz about the launch around the City.
Much of that buzz is coming from the proprietary trading
houses. Attracted by the lower fees, the lower participation
from HFTs expected on the platform and the belief that the
banks, who are expected to benefit from the margin efficiency
enabled by portfolio margining across the yield
curve, will provide liquidity, London's largest prop
houses are increasingly talking up the prospects of the
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