Squawker prepares for March debut with SIX Financial Information
Knowledge is power: Squawker will use SIX Financial Information data
Squawker, the start-up block trading venue headed by Christopher Gregory, has moved one step closer to its goal of providing a pan-European mid-point matching service for banks and brokers, following a deal between it and Switzerland’s SIX Financial Information this week.
Based on social networking principles, Squawker is a sell-side to sell-side block trading venue in which participants can choose which counterparties they wish to expose their orders to. The idea is to encourage sell-side firms to post large blocks of liquidity, without the risk of causing excessive market impact.
Under the deal, SIX Financial Information will provide the market data that Squawker will need to match its sell-side clients at the mid-point. The real-time data is fundamental to the working of a platform that markets itself as a sell-side to sell-side block crossing network. It will also be behind fat-finger checks and information on the opening and closing auctions at the exchanges, as well as trading halts and resumptions.
“Squawker’s collaboration with SIX Financial Information is crucial to the venue’s success,” said Gregory, co-founder and chief executive at Squawker. “Using SIX Financial Information’s data via the Squawker platform, Squawker’s sell-side trading participants of mid-price interest will always execute at the consolidated mid-price of Europe’s national exchanges and major MTFs. Similarly, VWAP-interested participants will be able to agree a block trade at any point throughout the day that is guaranteed to execute at the day’s consolidated VWAP price.”
As a discretionary platform, Squawker will be different to other European trading venues such as the multilateral trading facilities, which are bound to offer free access under the upcoming MiFID II legislation being discussed in the European Parliament. Squawker matches participants based on price, volume and time; the final deal is then negotiated bilaterally.
The platform also claims to be free from computer-generated algorithms, which have become ubiquitous on most lit stock exchanges and trading venues. On Squawker, all trades will be made by human traders – a measure the platform says makes it the first ‘toxic-free’ trading venue. While alternatives such as dark pools and broker crossing networks exist for buy-side flow, Squawker aims to target sell-side flows, which it says have yet to find a suitable equivalent.
In November, Squawker formed an agreement for BT Radianz to host and manage its technology infrastructure. BT Radianz operates a financial extranet, which will handle connectivity to Squawker through cloud technology.
Meanwhile, SIX Group already has a partnership with traditional buy-side block crossing network Liquidnet. Dubbed the SIX Swiss Swiss Exchange Liquidnet Service, that agreement provides a joint liquidity pool between participants on the two trading venues.
