Euronext launches trading platform to ward against high-frequency traders

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Euronext, the European exchanges operator, is to follow its main rivals in launching a share trading platform for institutional investors who want to shield their trades for large blocks of shares from aggressive high-frequency traders.

The Paris-based group said on Wednesday it would launch the service in the middle of the year, as it delivered its full-year results.

Rivals like the London Stock Exchange Group and Bats Europe have launched similar venues in the last year, in response to incoming European markets rules that allow fund managers to trade sizeable deals away from the public market. Euronext’s venue has been developed in conjunction with Ax Trading, a US financial technology group.

For the year to December 31, Euronext said revenue fell 4.3 per cent to €496.4m, hit by low market volatility. Pre-tax profits rose from €238.6m to €264m on a series of cost-cutting measures, which boosted margins.

Its unveiling is the latest in a series of steps for Euronext as it seeks new revenue streams since regaining its independence in 2014.

It has agreed to buy the French arm of LCH, the clearing house, from the London Stock Exchange if the LSE completes its deal to merge with Deutsche Borse, for €510m.

It also announced the launch of an electronic platform that can help customers to finance assets and swap collateral that they need to back commodities and fixed income trades

The company said market conditions last year were marked by below trend volatility with notable trading spikes around the UK’s Brexit vote in July and the US election in November.

Britain’s looming exit from the EU has also raised fresh questions about London’s role as a major euro clearing derivatives hub after calls from senior European politicians for the EU to euro repatriate clearing activity to the continent. Any such move could cost the City around 83,000 according to one estimate.

Chairman and chief executive Stéphane Boujnah said the upcoming year “will be a critical year for our industry landscape”.

“These results demonstrate Euronext’s continuous capability to service our shareholders and customers, and to deliver value against a tough trading environment”.

“We will remain focused on executing our Agility for Growth strategy and maximizing opportunities that may arise, as we did with the agreement to potentially acquire LCH.Clearnet S.A.”

Euronext said it has achieved €15.6m of savings since the second quarter of the year as part of a cost-cutting drive. It will propose a dividend of €1.42 per share, a rise from €1.24, at its annual general meeting in May.

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