Equiduct: evolutionary leapfrog
Equiduct is a pan-European trading platform majority owned by Börse Berlin, one of Germany’s independent regional stock exchanges, that is scheduled for launch in mid-2008.
"After 322 years of business as an open-outcry exchange, the Berlin stock exchange decided that its business model had to change," explains Artur Fischer, chairman of Equiduct. "With this technology, we leapfrog several evolutionary steps, jumping from a domestic regional exchange to the pan-European level."
Equiduct will offer two market models. One, called the Hybrid Book, will be a fast, high-capacity central limit order book in which orders from participants will compete directly alongside firm, executable, continuous quotes from market makers. The other, called PartnerEx, is a market within Equiduct in which liquidity providers – market makers – agree to execute orders for their clients at what Equiduct calculates is the European volume weighted best bid-offer (VWBBO) price.
In order to calculate the VWBBO, Equiduct will scan all the prices quoted for a particular security on all the exchanges and MTFs quoting it, taking into account the number of shares quoted on each, and calculate an average price based on the size of the trade.