In what it claims to be a first for the pan-European market, SIX has introduced Quote-on-Demand Europe (QOD Europe), an exchange traded request-for-quote (RFQ) platform. Described as a service extension to its ETF franchise and a complement to the established multilateral open order book in a press release, the solution increases the range of tradable products on SIX Swiss Exchange from 1,700 to almost 6,000.
With QOD Europe, SIX’s clients will now be able to trade ETFs listed on other primary exchanges in the bloc, including the London Stock Exchange (LSE), Deutsche Börse, and Euronext. Straight-through processing (STP) using the interoperable CCP model with settlement into domestic CSDs provides an efficient, “one-stop shop” experience for cross-EU trading in ETFs.
Participants can now take advantage of their established CCP, removing the need to take on additional links to third parties. Counterparty risk is thus reduced, settlement efficiency improved, and costs optimised. SIX works with three CCPs: LCH, Cboe Clear Europe, and its own – SIX Clear – to clear all trades in QOD, then instruct settlement to the local CSD of the respective exchange listing of the respective trading venue. SIX claims that over 95 percent of trades in QOD are executed at the European Best Bid Offer (EBBO) or better.
For ETF issuers, the platform is expected to increase the attractiveness of ETFs listed on SIX Swiss Exchange, as “with one single listing, all corresponding EU-cross listings will be admitted to trading on QOD Europe. The solution uses high quality reference data from ETF and index data provider Ultumus.