The platform is slated for a  November launch, and will provide  access to all of the 2,000 stocks  on the exchange, plus derivatives,  exchange-traded funds, warrants  and interest rate securities.  The second platform,  PureMatch, will be run parallel  to TradeMatch and is being built  for high-frequency traders. But it  will only offer access to the largest  200 stocks – curbing the black  boxes’ ability to trade further down  the food chain – and no crossing  mechanisms through its colocation  facility, which is still under  construction.  But co-location will offer  traders “zero latency” because their  computer servers will be “sitting in  the host, the ASX system,” Murphy  said.  “A lot of high frequency  trading is attracted by two markets  operating in parallel…The ability  of the trader to arbitrage the two  prices is what will attract high  frequency traders to this market.”  Murphy has not disclosed the  pricing mechanism that ASX will  subject high-frequency traders  to, but Fowler at Chi-X says the  entrant’s new venue will employ the  “maker taker” arrangement it uses  in Europe.

This provides stock sellers –  or liquidity ‘makers’ – in Europe  with a 0.2 basis points rebate for  using Chi-X, while the venue  receives 0.1 basis point, from the  0.3 basis points execution fee paid  by the purchaser of the stock. But  Fowler would not reveal the precise  earnings that makers and the venue  would take by selling through  Chi-X Australia.  Currently, the ASX charges  0.28 bps for each trade. Fowler  admits that “we’d have to come  in below 0.28 bps to make it  attractive”.  In addition to the new parallel  trading platforms, the ASX is  developing a range of new order  types:  -Centre Point Order, enabling  investors to anonymously transact  at the ‘midpoint’ price between  the best bid and offer on the ASX  Central Limit Order Book;  -Centre Point Crossing, which  provides a 30 second window  between initiation and execution of  a cross at a midpoint price;  -Undisclosed Orders, which  can be used when executing large  orders worth more than $500,000.

This volume will be invisible to the  general market, but the transaction  price will be visible, and the orders  will be subject to the same timing  and pricing priority rules. Once the  remaining volume to be transacted  falls below $500,000, the amount  to be executed will be visible;  -Iceberg Orders, which allow  for big orders to be executed in  stages. “For orders of 10,000 shares,  you don’t want to drop that straight  into the market,” Murphy says, so  an order of 1,000 shares will be  submitted, executed, and followed  by another order of the same  amount until the all 10,000 shares  have been executed; and  -VolumeMatch, which provides  pre-trade anonymity for orders  above $1 million. It will also target  the best price during a day’s trading  – outside of the morning and  afternoon auctions – for execution.  The ASX will also run a smart  order routing service, called ASX  Best, enabling participants to find  the most advantageous means of  executing trades through the bourse  and, potentially, through competing  market operators in the future,  Murphy says.

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