London Stock Exchange Group and TMX Group Inc. (TMX) today announced the formation of a new strategic partnership in derivatives.
At the core of this collaboration is the development of EDX London, the equity derivatives business of the London Stock Exchange. Specifically, London Stock Exchange will acquire a licence to use SOLA® Trading, a leading derivatives trading technology developed by Montréal Exchange, a subsidiary of TMX. In addition, TMX is in advanced negotiations with London Stock Exchange to acquire a minority position in EDX London.
“TMX is very proud of the SOLA technology and we are pleased that London Stock Exchange Group has chosen the platform for its derivatives businesses,” said Thomas Kloet, chief executive officer, TMX. “We are also very excited about the opportunity to participate in the growth and development of the European derivatives market.”
Clara Furse, chief executive of London Stock Exchange Group, said: “The use of SOLA will give the Group a state-of-the art, proven derivatives trading platform, significantly increasing our ability to develop our derivatives markets. Moreover, our partnership with TMX offers exciting scope for developing new products, building on our recent success with our highly liquid Russian derivatives market.”
It is anticipated that EDX London, which offers access to trading and clearing services in Nordic and Russian equity and fixed income derivatives, will move onto SOLA Trading technology in November 2009. The introduction of new trading technology will bring lower latency and richer functionality, providing member firms with new opportunities to develop their trading strategies and broaden their service offering through the provision of Direct Access.
SOLA Trading, the TMX proprietary electronic trading platform, provides an extremely fast and reliable trading system for a variety of financial products such as options and futures. It is scalable, enabling the introduction of new products and significant volume growth with limited incremental costs. SOLA offers exceptional performance and capacity at a very low cost, positioning it as one of the leading derivatives platforms in the world.
The derivatives markets of TMX and London Stock Exchange Group have a broad reach in terms of their membership and product range. TMX’s subsidiaries operate Montréal Exchange, covering Canadian derivatives, and are majority owner and technology provider for Boston Options Exchange (BOX), focusing on US equity options. London Stock Exchange Group’s derivatives markets encompass: EDX London; IDEM, the Milan-based market offering trading in Italian equity derivatives; and IDEX, the recently launched market for power derivatives.
