Post on 12-Jan-2016
transcript
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Presentation to the Danish Stockbrokers Association Olof Neiglick, CEO
October 1, 2008
A new way of trading Nordic equities
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Exchange and Clearing Industry in transformation
CCP introduction Facilitating x-border tradingRegulators pressing for interoperability
MIFID and Regulation
Breakup of thetraditional value chain
Exchange consolidation
Low-cost entrants
TechnologyDMA
Algorithmic tradingLatency race
NYSE-Euronext
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Burgundy - cutting costs and providing advanced functionality
Burgundy primary objectives;
Nordic perspective
Strengthening the Nordic region as a financial center and supplier of public equity for Nordic companies long term
CostBurgundy will be a cost effective alternative to existing trading venues
Platform functionality and performance
Burgundy will provide a fast, low latency solution offering advanced trading functions for algo trading
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Three value creation levers for the Nordic industry
Efficient execution
Marketinformation
CCP
SpeedLow latencyLocalized orderbooks
Level 1 andLevel 2 live market data Cooperation with 3rd party C/House
In-scope for Q2/2009 delivery
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Nordic exchange revenue estimates – equities (MSEK)
Source: Oslo Bors,/OMX reports, own analysis
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Alternative venues trading fees vs incumbents
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Euronext Deutsche Börse OMX European Avg LSE Italy Turquoise CHI-X
Avg bps / trade, Source: FPK Research, Wagner
~80%reducedfee
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Burgundy
A Pan-Nordic platform
High-performance matching engine
Low latency
Algo-friendlyfunctionality
Localisedmarket modelStockholm
Oslo
Copenhagen
Helsinki
London Hub
Instrument universe available for trading
Cash equities
Rights, interim shares
Warrants
Structured notes
ETF
- Currency denominated as in home market
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Gradual rollout starting in Q2/2009
~ 800+ equities
- Large/Mid/Small caps
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48%
Regional members – large potential
Source: Inner circle, OMX statistics, SSX cash market, total traded volume. Outer circle, active traders with more than 2 percent of local main exchange volume.
60%
A large number of Nordic banks and brokers has joined or presented a positive view on Burgundy. Burgundy´s goal is that its shareholders will distribute more than 50 percent of
the total trading volume in the Nordic region
A large number of Nordic banks and brokers has joined or presented a positive view on Burgundy. Burgundy´s goal is that its shareholders will distribute more than 50 percent of
the total trading volume in the Nordic region
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Burgyndy structure
Shareholders
Board of directors
A group of Nordic banks and securities houses are founding members and equal investors of Burgundy
Two independent directors, one of which is to be Chairman. Up to 9 directors from shareholders
CEO Operational since September
Legal frameworkApplication filed with the Swedish Financial
Supervisory to operate an MTF in the Nordic Countries.
Financing Capital raised from existing shareholders in September
Trading platform Cinnober Trade Express
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Burgundy organisation
Management
MarketplaceOperations
SurveillanceBusiness
DevelopmentSales &
InformationLegal &
Compliance
Open on all Nordic trading days
~ 25 FTE’s
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Clearing & Settlement
Matching Member NCSD
Burgundy will keep current means and provisions for clearing and settlement – no changes as compared to OMX / OSE
However, introducing a CCP would have certain advantages and Burgundy will follow market development closely
The total number of transactions is expected to increase as a result of market fragmentation and lower transaction costs
Transaction processing after the trade is made will not be changed/impacted as a result of Burgundy
Transaction processing after the trade is made will not be changed/impacted as a result of Burgundy
OMXBurgundy Order
Settlement
FRONT
ORCTrading
Back officeFIX VPS
VPVPC
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Anyone for cash market clearing ?
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2009 will offer increased complexity
OMX Exchanges
NCSD
Trading CCP Settlement
OMX Exchanges ?
LCH Clearnet
How to avoid a ”spaghetti” solution ?
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Important evaluation criterias for choosing a CCP
Support MTF:s and legacy venues
Risk sharing or Risk Compliant ?
Business model (Profit maximisation or Cost allocation)
Experience
Time to market
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Burgundy’s position
Mandatory CCP increase attractiveness to members
Different needs depending on member type
Need to respect large market participants time to market due to ”hard-wiring” of retail STP flow
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Burgundy can handle BOTH solutions
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Trading on Burgundy starts during first half of 2009
June 2008 Jan 2009 June 2009
Public announcement
CEO, Board of directors, Financing
Required authorization
Build organization
System tests
Launch
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Summary of Burgundy offering
Burgundy is a new Nordic MTF that will be launched during first half of 2009
Burgundy aims at− Keeping order matching in the region− Introducing competitive trading solutions in the region− Launching a price competitive, advanced functional trading platform during
the first half of 2009
Current shareholders are Avanza Bank, Carnegie, Evli, Handelsbanken,Kaupthing, Neonet, Nordnet Bank, SEB, Swedbank, Öhman and HQ
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Burgundy´s vision is to be the leading platform for trading Nordic shares
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join@burgundy.se
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Contact Details
Olof Neiglick, CEO
olof@burgundy.se Voice: +46-705545224
Assistant
Julia Hadmark Voice: +46-850314375
julia@burgundy.se