Chi-X(R) Europe Limited today marked the passage of its inaugural
year as the first and only live, pan-European equity Multilateral
Trading Facility (MTF). Since officially launching on 30 March 2007 by
trading, clearing and settling the component stocks of the AEX 25
(Dutch) and DAX 30 (German) indices with the help of Fortis´ European
Multilateral Clearing Facility (EMCF), Chi-X Europe has added the FTSE
100 (British), CAC 40 (French), SMI 20 (Swiss) and OMX Stockholm 30
(Swedish) indices, which represent Europe´s most significant markets
by volume and turnover.
"It has been an encouraging first year for Chi-X Europe, as we
have established ourselves as a significant alternative execution
venue for European equities," commented Tony Mackay, CEO of Chi-X
Global, a holding company for Instinet´s Chi-X platforms. "Within that
time we have seen steady growth by offering participants a high-speed,
low-cost, high-capacity platform that supports a wide range of order
types and consequently allows them to meet their own best execution
objectives."
Added Peter Randall, CEO of Chi-X Europe: "Going forward, Chi-X
Europe will continue to look for ways to deliver substantial value for
investors. We are pleased with the results we have achieved to date,
and excited about the next stage in our development."
Chi-X Europe´s First Year Highlights
Growing market ratios(1)
-- Over the last 12 months, Chi-X Europe market ratios have
steadily climbed. Chi-X Europe achieved a peak market ratio
volume of 13.18 percent of total trading in FTSE100 stocks on
13 March 2008. On a similar basis, Chi-X Europe achieved 6.82
percent of DAX 30 trading on 14 March 2008; 10.00 percent of
AEX 25 trading on 14 March 2008; and 5.86 percent of CAC 40
trading on 14 March 2008 (see table below).
High quality execution
-- Chi-X Europe offers significant savings to its market
participants and is committed to delivering continuing price
value. Since launch, on average, more than half of all trades
have been executed within the spreads of the underlying
exchanges. As a result, participants have enjoyed an average
price improvement(2) of 2.67 bps on Chi-X Europe since its
launch when compared to trading on the primary exchange.
Low latency
-- Chi-X Europe offers an average roundtrip latency of two
milliseconds when proximity hosted and an average internal
latency of 890 microseconds(3), which is among the fastest in
the industry and up to 10 times faster(4) than the fastest
European primary exchange.
Low costs
-- With execution costs of 0.05 bps, (based on a
passive/aggressive rebate ratio of 50:50) trading on Chi-X
Europe is measurably less expensive than trading on the
underlying stock exchanges. In addition, clearing and
settlement are now also less costly, with EMCF offering
clearing at, on average, half the price of the incumbent
market infrastructure.(5)
High capacity
-- Chi-X Europe can process 30,000 messages per second, according
to NYSE TransactTool´s January 2007 measurement, and due to
the system´s architecture, capacity is easily scalable to meet
the future demands of the high frequency algorithmic trading
community.
Innovative order types
-- Chi-X Europe´s innovative order types - including limit,
market, iceberg, execute or eliminate, "fill or kill", hidden,
mid-peg and primary-peg - offer participants greater trading
flexibility.
Smart order routing
-- Chi-X Europe works with multiple third-party vendors to
provide leading-edge Smart Order Routing solutions, which
allow participants to automatically route trades to the
preferred execution destination.
Free market data
-- Since launch, Chi-X Europe has also offered its market data
free of charge with no licence fees or per user charges.
Major shareholder base
-- Chi-X Europe benefits from equity ownership participation by a
consortium of major global financial institutions, each of
whom took minority stakes in Chi-X Europe in December 2007.
These shareholders are: BNP Paribas, Citadel, Citi, Credit
Suisse, Fortis, Getco Europe, Ltd, Goldman Sachs, Lehman
Brothers, Merrill Lynch, Morgan Stanley, Optiver, Societe
Generale and UBS.
1. Market ratio is defined as the percentage of Chi-X Europe
volume as a proportion of primary exchange volume. For comparison,
market share is defined as the percentage of combined Chi-X Europe and
primary exchange volume executed on Chi-X Europe.
2. Price improvement defined as the difference between average
primary exchange price and Chi-X execution price.
3. As measured by Instinet Europe Limited.
4. Based on Instinet Europe Limited´s exchange linkages
performance measurement statistics for average DMA order messaging in
June 2007.
5. Comparison based on Instinet Europe Limited figures of average
European clearing and settlement costs.
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Chi-X(R) Europe Year-One Trading Highlights
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Stock Market Share Market Ratio Date
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AEX 25 (Dutch)
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Philips KON 44.07% 78.79% 29-Aug-07
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Aegon 22.04% 28.27% 10-Jan-08
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ING Groep 19.52% 24.25% 18-Dec-07
----------------------------------------------------------------------
Hagemeyer 18.41% 22.56% 11-Jan-08
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Royal Dutch Shell A 17.19% 20.76% 28-Dec-07
----------------------------------------------------------------------
DAX 30 (German)
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TUI 24.24% 31.99% 31-Mar-08
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BASF 22.27% 28.65% 20-Sep-07
----------------------------------------------------------------------
Bayer 17.36% 21.01% 18-Sep-07
----------------------------------------------------------------------
Munich Re 17.26% 20.86% 14-Mar-08
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Merck 16.14% 19.24% 11-Mar-08
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FTSE 100 (UK)
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Royal & Sun Alliance Ins Group 34.30% 52.20% 12-Mar-08
----------------------------------------------------------------------
Old Mutual 32.87% 48.97% 13-Mar-08
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Standard Chartered 32.04% 47.15% 27-Mar-08
----------------------------------------------------------------------
Legal & General Group 27.97% 38.83% 13-Mar-08
----------------------------------------------------------------------
Cable & Wireless 27.88% 38.66% 13-Mar-08
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Prudential 23.61% 30.90% 28-Feb-08
----------------------------------------------------------------------
Lloyds TSB Group 23.43% 30.60% 18-Mar-08
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Aviva 23.00% 29.87% 28-Mar-08
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BT Group 22.78% 29.50% 14-Mar-08
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Unilever 21.35% 27.15% 27-Mar-08
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CAC 40 (French)
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Credit Agricole 15.81% 18.78% 3-Mar-08
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Gaz de France 12.48% 14.26% 13-Mar-08
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France Telecom 12.45% 14.22% 14-Mar-08
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AXA 12.41% 14.17% 14-Mar-08
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BNP Paribas 11.30% 12.74% 15-Jan-08
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SMI 20 (Swiss)
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UBS 6.71% 7.19% 21-Jan-08
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CS Group 5.26% 5.55% 23-Jan-08
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Swatch Group 3.32% 3.43% 28-Jan-08
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Clariant 2.70% 2.77% 5-Feb-08
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Adecco 2.24% 2.29% 20-Feb-08
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Overall
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AEX 25 10.00% 13-Mar-08
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DAX 30 6.82% 14-Mar-08
------------------------------- ---------------------------
FTSE 100 13.18% 13-Mar-08
------------------------------- ---------------------------
CAC 40 5.86% 14-Mar-08
------------------------------- ---------------------------
SMI 20 2.03% 14-Mar-08
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About Chi-X(R) Europe
Chi-X Europe Limited, a majority-owned, indirect subsidiary of
Instinet Incorporated, is an FSA-authorised securities firm operating
as an MTF (Multilateral Trading Facility) for the trading of a wide
range of European equities.
Chi-X Europe´s low-cost, streamlined model is designed to help
participants achieve ultra-low execution, clearing and settlement
costs. Benchmark tests showed the Chi-X Europe operating model to be
up to 10 times faster* and significantly less expensive than Europe´s
traditional equity exchanges. Chi-X Europe disseminates market data to
clients directly and via third-party market data vendors at no cost,
and off-exchange trade reporting is available for a low monthly fee.
For more information, please visit: www.chi-x.com.
* Based on Instinet Europe Limited´s exchange linkages performance
measurement statistics for average DMA order messaging in June 2007.
These Instinet internal figures are for round-trip latency message
acknowledgement based on sending an average number of messages to the
exchange system and obtaining a response back to Instinet´s system
over the course of a normal trading day. They are provided for
illustrative purposes only and are not intended to represent an
independent performance measure of latency. Market volatility and
volume may affect actual performance.
About Instinet
Instinet is a global securities firm, providing over 1,500 clients
around the world with the necessary trading tools, ATS platforms and
global agency liquidity to achieve a high quality trade execution in
more than 40 countries. Acting solely as an agent for its customers,
Instinet seeks to improve institutional investment performance and
lower overall trading costs through its various front-end trading
systems, securities crossing networks, smart-routing technology,
algorithms, commission management programs and investment research
products. Instinet, through its subsidiaries, operates a wide array of
ATS platforms around the world, including CBX(SM) in the United
States, JapanCrossing(SM) in Asia and Chi-X(R) in Europe, Canada and,
soon, Australia. The firm, which is a wholly-owned subsidiary of
Nomura Holdings, Inc., has offices in North America, Europe and the
Asia-Pacific region. For more information, please visit
www.instinet.com.
(C)2008 Chi-X Europe Limited. All rights reserved. INSTINET is a
registered trademark in the United States and in other countries
throughout the world. CHI-X is a registered trademark in the UK and
Europe. Approved for distribution in Europe by Chi-X Europe Limited,
which is authorised and regulated by the Financial Services Authority.
Approved for distribution in the United States by Instinet, LLC,
member FINRA/SIPC.