London Stock Exchange to launch midday auction

  • Auction will encourage larger, institutional and smaller retail size trading to take place in lit, price forming venue
  • Introduction follows comprehensive, market-wide consultation and comes with strong buy-side support
  • Continuous trading of stocks to pause for 2 minutes every day at 12.00

London Stock Exchange today announces that it will be introducing a new intraday auction for all SETS equities, the largest and most liquid shares traded on its markets. During the two minute auction, which will take place at 12.00 every day, continuous trading of shares will be paused on London Stock Exchange.

Brian Schwieger, Head of Equities, London Stock Exchange said: “This is a very significant change to the trading day, following a detailed consultation with market participants. The introduction of the intraday auction is in direct response to demand from buy-side participants for neutral, infrastructure-led solutions for trading in large blocks. The auction will allow participants to place orders in a truly confidential, yet price-forming environment via a well understood mechanism.

“The 12.00 timing is based on market feedback, matching the current intraday auction in Germany. We are aware that institutional investors hope it will encourage European markets to follow suit, creating over time a significant and harmonised pan-European focus for liquidity at midday across the continent.”

The intraday auction will go live in late 2015, giving market participants opportunity to update and reconfigure their own systems. As with the current opening and closing auction, there will be no additional fee or extra direct cost imposed on customers in order to take part in the auction. The auction will apply to all SETS equity securities.

How will the auction work?

The auction process will be like that used in London Stock Exchange’s opening and closing auctions. At the commencement of the auction call at 12.00, all orders that have been parked for that specific auction will be injected immediately. Orders may then be entered, modified and deleted during an auction call, but no automated execution occurs.

Throughout the entire period London Stock Exchange will disseminate the most up to date indicative auction uncrossing price. This will be updated whenever orders are added, deleted or modified. At the end of the auction period, the balance of buy and sell orders will be used to calculate the uncrossing price and continuous trading will recommence.

To view the results of the market consultation: http://www.londonstockexchange.com/traders-and-brokers/rules-regulations/change-and-updates/stock-exchange-notices/sen-home.htm

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Tom Gilbert

+44 (0)20 7797 1222

newsroom@lseg.com

Notes to editors:

About London Stock Exchange Group:

London Stock Exchange Group (LSE.L) is a diversified international exchange Group that sits at the heart of the world's financial community. The Group can trace its history back to 1801.

The Group operates a broad range of international equity, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS, Europe's leading fixed income market; and the pan-European equities platform, Turquoise. Through its markets, the Group offers international business, and investors, unrivalled access to Europe's capital markets.

Post trade and risk management services are a significant and growing part of the Group’s business operations. LSEG operates CC&G, the Rome headquartered CCP and Monte Titoli, the significant European settlement business, selected as a first wave T2S participant. The Group is also a majority owner of leading multi-asset global CCP, LCH.Clearnet.

The Group offers its customers an extensive range of real-time and reference data products, including SEDOL, UnaVista, Proquote and RNS. FTSE calculates thousands of unique indices that measure and benchmark markets and asset classes in more than 80 countries around the world.

London Stock Exchange Group is also a leading developer of high performance trading platforms and capital markets software. In addition to the Group’s own markets, over 40 other organisations and exchanges around the world use the Group’s MillenniumIT trading, surveillance and post trade technology.

Headquartered in London, United Kingdom with significant operations in Italy, France, North America and Sri Lanka, the Group employs approximately 2,800 people.

Further information on London Stock Exchange Group can be found at www.lseg.com.