NASDAQ OMX - Nordic Securities Markets BjÃ¸rn Sibbern

© Copyright 2011, The NASDAQ OMX Group, Inc. All rights reserved. 

NASDAQ OMX - Nordic Securities Markets 

Bjørn Sibbern

NASDAQ OMX NORDIC 

TRANSACTION SERVICES SUMMARY 

Sweden* 

GDP Growth 3.9% 

Public Debt 38.4% 

Operating 7 stock exchanges 

• 637 listed companies 

• Total Market Cap of $936 B 

• 185 unique members 

• Cash Equity turnover $3,2 B per day 

• Financial derivatives contracts 466,000 per day 

Operating NASDAQ OMX Commodities 

• The world’s largest power derivatives exchange 

• One of Europe’s largest carbon exchanges 

• N2EX – a marketplace for UK power contracts 

• 138 trading & clearing members 

Iceland 

N2EX 

UK Power 

Denmark* 

Norway* 





Dutch Power 

German Power 

Estonia 

Latvia 

Lithuania 

Finland* 



EU27* 



• Nordic Power: 1,723,330,962 MWh (total cleared 2011) 

• UK Power: 2,728,140 MWh (avg. monthly volume Q1 2012) 

2 

Exchange business in Iceland, Estonia, 

Lathvia, Lithuania 

Exchange & Power business in Sweden, 

Finland, Denmark and Norway 

Power offering in UK, Germany, Netherlands 

* 

Source: 2011 World Bank


NASDAQ OMX Nordic wants to be the primary market for trading and Clearing in all Nordic 

Equities, Exchange Traded & Structured Products, Fixed Income, Derivatives & Commodities 

A Multiple Asset Classes venue for Nordic & European instruments 

EQUITIES DARIVATIVES FIXED INCOME COMMODITIES 

New Markets New Products New Clients 

Norwegian Share 

Trading 

UK Power 

UK Gas 

IRS Scandinavian 

currencies 

Clearing of OTC 

Products 

Seafood Derivatives 

European Customers 

Algorithmic trading 

in Derivatives 

Cross Selling 

Freight 

Weekly Options 

NOS ASA Clients 

Joint Venture 

NODE 

GCMs 

3

Changes in the Nordic & European Exchange landscape 

1998: Merger between OM 

& Stockholm Stock Exchange 

2004: Acquisition of 

Vilnius Stock Exchange 

2006: Merger of OMX and 

Iceland Stock Exchange 


NASDAQ 

2009: EDX 

Agreement 

terminted 

2012/13 EMIR: Mandatory clearing 

of eligible OTC derivatives 

1998 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 


HEX, including Tallinn & 

Riga exchanges 


Copenhagen Stock Exchange 

2008: Acquisition of Nord Pool 

Creation of Commodities business 

Ownership 

consolidation 

Few platforms 

Consolidations 

•Between Regulated 

Markets and MTFs 

•Mergers between 

crossing networks 

and MTFs 

• Mergers of 

European CSDs 

Consolidation 

Fragmentation 

Consolidation 

2007: MiFID (I) 

Concentration rule abolished 

Entrance of new market participants MTFs 

Introduction of dark pools and Internalizers 

Competition in European equity business 

Fragmentation og liquidity and data 

2014 MiFID (II): 

• Potential creation of a new category 

of multilateral trading venue i.e. OTFs 

• More transparency 

• Trading of eligible OTC derivatives 

on organized venues


EQUITY MARKET – STRONG 

IN A HIGHLY COMPETITIVE 

ENVIRONMENT 

NASDAQ OMX 

MARKET SHARE OF OWN LISTED SHARE TRADING % 

100% 

90% 

80% 

70% 

End of Year 2009 



Retains high market share compared to 

other European exchanges . Market share 

of own listed Nordic share trading was 

68,55 by Q1 2012 

Despite declining market share in Nordic 

equities – NASDAQ OMX is gaining market 

share at total European turnover level 

60% 

50% 

40% 

Oslo SIX Swiss Nasdaq OMX Deutsche 

Boerse 

Euronext 

LSE 

Drivers for market share 

in European equity 

• Liquidity 

• High share of EBBO on a market 

• Market structure 

• Total cost of trading 

• Strong retail order flow in orderbooks 

5 

NASDAQ OMX LISTED COMPANIES’ SHARE OF EUROPEAN TURNOVER 

10% 

9% 

8,4% 

8% 

7,5% 7,6% 

6,7% 

7,0% 

7% 

6% 

5% 

4% 

3% 

2% 

1% 

0% 

2008 2009 2010 2011 2012-Q1

Building the Nordic trading and clearing infrastructure for the future 

OMX Nordic, Iceland & 

Baltic Exchanges 

2008: Merger of OMX 

and NASDAQ 

2008: Acquisition of 

Nord Pool Creation of 

Commodities business 

2008 

2009 

2010 2011 

2012 

NASDAQ OMX Nordic Technology Roadmap completed: 

Multi asset class trading and clearing on Genium INET platform 

Ensuring improved capacity, low latency and cost efficiency 

Infrastructure based on several systems: 

SAXESS (Cash Equities, Fixed Income), 

Click & Secure (Derivatives), 

Targien (Marketdata) 

Equities 

Fixed 

income 

Cash 

Derivatives 

Derivatives 

Cash 

CCP 

2009-10 

2010-10 

2010-10 

2011-06 

INET 

2010-02 

Genium INET 

Commodities 

Derivatives 

2011-11

NASDAQ OMX Nordic Continues to Develop the Nordic Market Places 

…to keep up with Market Trends and to Keep Markets Attractive 

Standardization 

of the Nordic markets 

CCP launched October 2009 

CCP-only membership 

New Cash equity Trading Platform - INET 

launched February 2010 

New Trading & Clearing platform for Equity 

and Fixed Income derivatives - Genium INET 

launched Oct 2010 

Nordic Co-location services in Stockholm 

Sponsored Access with PRM tools 

Dark pool - Nordic@Mid Nov 2010 

Norwegian Equity and Derivative offering 

Nordic Order Routing February 2011 

CCP Interoperability for competitive clearing 

Implications: 

• Reducing operation costs through new 

consolidated infrastructure will enable the 

possibility to be competitive on trading fees. 

• High Market share in own listed shares 

• Increasing share of European Total Turnover 

• Lower total cost of trading 

• Lower quoted Spreads 

• High Market Quality 

• Enabling ultra low latency and high 

throughput 

Expectations: 

• Significant increase in interest from 

algorithmic traders. Strong Pipeline for new 

members 

• Significant increase in the demand for Colocation 

and access services 

• Reduced cost for market participants => 

more volumes and higher velocity

Since MiFID a lot of adjustments have been made to adapt to the 

competition and changing market conditions 

2007: MiFID 

Concentration rule abolished 

Entrance of new market participants MTFs 

Introduction of dark pools and Internalizers 

Competition in European cash equity business 

Fragmentation og liquidity and data 

2014 MiFID II: 

• Creation of a OTF category of multilateral trading venue 

• More transparency 

• Trading of eligible OTC derivatives on organized venues 

2012/13 EMIR: Mandatory clearing 

of eligible OTC derivatives 

2007 2008 2009 

2010 2011 2012 

2013 2014 

NASDAQ OMX Nordic Market Model changes due to legislation, competition or market preasure for harmonisation 

Internal initiative: 

• Harmonizing market 

model 

• Lowering trading 

fees 


• Introducing CCP in 

Nordic LargeCap 


• Implementation of 

INET for Equities 

• Introducing Co-Lo 

•Introducing Nordic@ 

Mid dark pool 


• Implementation of 

Genium INET 

• Introducing a Orderto-Trade 

ratio fee 


fees 

Changes in the future 

due to increasing market 

demand / pressure 

Ext. initiative/demand: 

• Implementing OTC/SI 

offering 


• MTF’s introducing 

CCP clearing 

• MTF’s pressuring for 

harmonized Tick-sizes 

by dumping spreads 


• Implementing FESE 

Tick-Size for LargeCap 

• Introducing 

Norwegian trading 

with CCP clearing and 

routing 


fees 


• Nordic Smart Order 

Routing - Feb 2011 

• CCP Interoperability 

• Pressure for further 

Standardization 

of the Nordic markets 

• Extending CCP scope? 

• European Tick-Size 

harmonization outside 

Blue-Chip shares? 

• PoTa for all instruments? 

• Extending and 

harmonizing opening/ 

closing hours in Europe? 

• Consolidation of data? 

• ???

WHERE IS THE NEW 

NORDIC FLOW 

COMING FROM 

Remote members’ trading 

activity have steadily 

increased on NASDAQ 

OMX in recent years 

Market Share (Turnover) 

80,0 % 

70,0 % 

60,0 % 

50,0 % 

40,0 % 

30,0 % 

NASDAQ OMX Nordic Market Share in Listed Shares traded by Non-Nordic Remorte 

members (Turnover traded) 

Stockholm - Non-Nordic Remote members 

Helsinki - Non-Nordic Remote members 

Copenhagen - Non-Nordic Remote members 

20,0 % 

Traditional broker flow is 

increasingly substituted 

by algorithmic flow – i.e. 

Smart Order Routers and 

HFT 

Type of member and flow traded on NASDAQ OMX Nordic Equity markets (Turnover) 

Not displayed Nordic members - Routing (DMA & Reporting) 

Nordic members - Algo & Sponsored Access 

Nordic members - Personal (Brokers) Not displayed Remote members - Routing (DMA & Reporting) 

Remote members - Algo & Sponsored Access 

Remote members - Personal (Brokers) 

45,0 % 

40,0 % 

35,0 % 

30,0 % 

25,0 % 

20,0 % 

15,0 % 

10,0 % 

5,0 % 

0,0 % 

Share of trading (Turnover)

TRADING VELOCITY AND 

HIGH EBBO ARE KEY 

DRIVERS FOR FUTURE 

GROWTH 

Nordic Equities: Great potential in 

increasing trading velocity 

Driving up velocity 

• Competition 

• Lower exchange fees 

• Lower clearing fees through CCP 

and coming interoperability between 

multiple CCPs on NASDAQ OMX’s 

Nordic market 

• Latency, capacity & Co-Lo services 

• Many new members 

• Strong liquidity 

• Very strong European Best Bid and 

Offer 

10 

TURNOVER VELOCITY ON EQUITY TRADING FOR BENCHMARK EXCHANGE 

Nordic & European 

NASDAQ OMX (US) 

250% 

200% 

150% 

100% 

50% 

0% 

NASDAQ OMX Nordic Exchange 

Average of European Benchmark Exchanges 

NASDAQ OMX (US) 

1200% 

900% 

600% 

300% 

0% 

Note: Avg Europe includes LSE, DB, NYSE Euronext and NASDAQ OMX Nordic (WFE) Source http://www.world-exchanges.org 

NASDAQ OMX Nordic defines EBBO prices approx 85-90 pct of the time (March 26 – April 20, 2012) 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

NASDAQ OMX S30 NASDAQ OMX C20 NASDAQ OMX H25 

100% 

100% 

90% 

90% 

NasdaqOMX 

80% 

80% 

70% 

70% 

ChiX 

60% 

60% 

50% 

50% 

Bats 

40% 

40% 

30% 

30% 

Turq 

20% 

20% 

10% 

10% 

Burg 

0% 

0%

NASDAQ OMX NORDIC WANTS TO 

SERVE ALL STAKEHOLDERS AND BE 

THE MAIN MARKET IN THE NORDICS 

What is our 

overall goal 

One 

infrastructure 

serving multiple 

Nordic markets & 

asset classes 

• To be the main (Primary) 

market for raising capital in the 

Nordic 

• To be the main (Secondary) 

market for trading Nordic 

securities 

• The most competitive venue 

for Nordic securities based on 

liquidity, price formation and 

total transaction cost 

• Genium INET build to be the 

fastest system and serving 

multiple asset classes 

• Cash Equity, Fixed Income 

and ETP’s, Derivatives and 

commodity products and 

continuesly adding new 

products (e.g. Binary- 

Options, ETF Options etc.) 

Vendors and 

media 

Technology 

providers 

Marketdata, 

Index & 

classification 

The main venue for listing of Nordic instruments 

Multiple asset classes 

Companies 

(from Large to 

Small) 

NASDAQ OMX 

NORDIC 

Local as well 

as global 

Exchange 

Other Issuers 

(ETP’s, ETF’s, 

Investment 

Funds, 

derivatives, 

commodities) 

Competing 

marketplaces 

(Regulated 

Exchanges & 

MTF’s) 

Member Firms 

(Local and 

Remote both 

small and large) 

How do we want 

to position our 

selves 

• Ensure that the Nordic market 

is growing relatively compared 

to Europe 

• Focus on increasing turnover 

velocity 

• Ensure a high market share in 

Nordic instruments 

• Focus on high EBBO 

• Low spreads 

• Primary market for trading 

Nordic 

11 

Local and 

Nordic SDA’s, 

FSA’s 

Investors 

(Shareholders & 

Buy-side) 

Algotrading 

(Traditional 

brokers and 

HFT) 

A local Exchange 

Covering the whole Nordic region 

Build on a Global competitive infrastructure

NASDAQ OMX Nordic 

…the leading venue for trading 

Nordic listed securities 

12

NASDAQ OMX - Nordic Securities Markets BjÃ¸rn Sibbern

Create successful ePaper yourself

Delete template?

Save as template?