Turquoise Trading

A Message from Lord Pickles and Lord Blunkett, followed by Turquoise Trading's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Turquoise Trading is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett
Pickles signature Rt Hon The Lord Eric Pickles


Highlighting best practice
Robert Barnes, CEO
Turquoise Global Holdings
and global head of Primary
Markets London Stock
Exchange Group
Turquoise Global Holdings is an investment firm authorised
to operate a “multilateral trading facility”, Turquoise®,
based in the City of London, majority owned, 51 per cent,
by London Stock Exchange Group and 49 per cent by 12 major
banks. Members include a wide range of global banks, domestic
brokers, specialist trading firms, and retail intermediaries.
Members, with a single connection to Turquoise, can trade
shares, depository receipts and “exchange traded funds”
(ETFs) of 19 European countries for settlement into a respective
country’s “central securities depository”. This illustrates the
ability of London’s international financial community to be
at the forefront of global market innovation and apply the
technologies to make it work.
Turquoise shares its core principles with London Stock Exchange Group: integrity,
innovation, partnership and excellence. The primary objective for Turquoise is to
be the multi-jurisdiction securities trading venue of choice. Our approach is to raise
visibility, widen membership and innovate with customers.
With an ageing population and an increasing reliance on private sector pensions
in Europe, capital markets need to be competitive to deliver meaningful long-term
investment returns. With European interest rates and real returns near zero, the focus
is on efficient trading to minimise investment cost and enhance long-termreturns.
By 2015, buyside asset managers, like Axa Investment Management, BlackRock,
Deutsche Asset Management, Fidelity and Norges Bank Investment Management,
had increasingly published views about the role of exchanges in well-functioning
markets, calling also for innovation in electronic block trading. In 2015, led by
a number of these largest and most respected global buyside asset managers
and sellside banks, there was an intensive selection process from 20 firms,
which narrowed to seven to three until Turquoise was privileged to be selected
as preferred partner for Plato Partnership, a not-for-profit company comprising
asset managers and broker dealers collaborating to bring creative solutions and
efficiencies to today’s complex equity market place.
Repeatedly, buyside dealers had expressed their opinion of the importance of a trusted
public exchange in the trading ecosystem that institutional investors could access
directly, with the sellside continuing to play a role. This required for the first time
the buyside, sellside and trading venue to collaborate in a new way. Subsequently,
Plato Partnership entered into a cooperation agreement with Turquoise.
The result was the launch in September 2016 of Turquoise Plato™ encompassing
the Turquoise dark pool services matching at midpoint price, including the award-
winning Turquoise Block Discovery™ and Turquoise Uncross™ rebranded as
»Chief executive: Robert Barnes
»Founded 2006 by banks
»Based in the City of London
»Services: Securities trading and
market data
»No. of employees: 35
»First trades in 2008
»LSEG acquires 51 per cent
»1 trillion+ traded in 2015
»European stocks + ETFs
»Electronic lit + dark trading
»Award-winning block trading
»Innovates with investors
»Members = EEA + Switzerland
Turquoise Plato Block Discovery™
and Turquoise Plato Uncross™.
A governance process was also
introduced that could turn best
practice ideas into action for the
benefit of investors through more
efficient trading and execution
Independent venue performance
analytic firms had already singled
out Turquoise Plato Uncross™
for the high quality of its periodic
random execution mechanism that
featured low price reversion after an
investor’s trade, thereby contributing
to consistently better trading results
for investors. Building on this
quality mechanism, Turquoise Plato
Block Discovery™ was designed in
cooperation with Turquoise buyside
and sellside customers for much larger
sized investments to enter Turquoise
and match as undisclosed “block
indications” that execute in Turquoise
Plato Uncross™.
Turquoise was invited to address
the IOSCO Board and Financial
Market Stakeholders in 2015 and
subsequently won the Financial News
2015 Award for Excellence in Trading
and Technology for Most Innovative
Trading Product/Service. In 2016,
Turquoise was honoured to feature
, and the
following year was recognised as winner
of TheTRADE’s Leaders in Trading 2017
Award for Block TradingVenue.
By listening to customers, Turquoise
has delivered a single European trading
venue based in London that empowers
investment firms with trading
innovations that can help them get
their business done. The offering covers
thousands of securities from blue chips
to small caps in small or large trade
sizes, with scale efficiency, potential
price improvement and the operational
benefits of straight-through processing.
In December 2017, Turquoise launched
its next intraday trading innovation in
partnership with customers. Turquoise
Lit Auctions™ subsequently grew
its activity from 1.0 million value
traded in January 2018 to more than
1.2billion in June 2018.
Some market regulators have expressed
interest and scrutiny of other venues
for the amount of same member–
member bilateral matching they claim
to process via their periodic lit auctions.
Turquoise granular analysis has shown
its own Turquoise Lit Auctions™ are
truly multilateral. In the period of
May and June 2018, Turquoise Lit
Auctions™ matched a total of more
than 165,000 trades, of which only
104 trades were same member on
both sides within the same maximum
potential 100 millisecond randomised
By listening to
investment firms
with trading
1. Turquoise: electronic trading platform based in the City of London,
used by investment firms; traded more than 1 trillion in UK and
European equities in 2015, from just an idea in 2006
2. Lit order book: order book that shows the price and size of orders
available to a trade
3. Dark pool: order book where the price and size of the order, pre-
trade, is not displayed, but post-trade is revealed
4. Touch prices: the best bid and offered prices to buy and sell shares
displayed on a lit order book before a trade
5. Midpoint price: the price in between the best bid and offered
prices: for example, if bid is 2 and offer is 4, the midpoint is 3
6. Implicit cost: the cost that impacts investment returns in addition
to the explicit tariff charged for trading
7. Crossing the spread: the act of lifting the offer or hitting the bid
adds implicit cost to investment
8. Plato Partnership: not-for-profit company comprising global asset
managers and broker dealers collaborating to bring creative solutions
and efficiencies to today’s complex equity market place
9. IOSCO: International Organization of Securities Commissions is an
association of organisations that regulate the world’s securities and
futures markets
Winning The TRADE
Leaders in Trading Award
Highlighting best practice
window for matching and with the
same size on both buy and sell. This
means orders sent to Turquoise Lit
Auctions™ are likely to interact
fully with all liquidity available in
Turquoise Lit Auctions™ on a truly
At Turquoise, our focus is to listen
to customers and prioritise how we
can help them to meet regulatory
obligations, reduce costs and generate
revenues through new business
initiatives which are developed in
partnership with Turquoise. Key
investment trends are the search for
growth and the complementary desire
to outperform benchmarks by trading
block liquidity through electronic
trading channels. We aim to respond
to this demand with innovation and
open access.
Top10 trades Value SoT
Share of
all venues Traded ex auction Trading
Turquoise 15.6m 3.0% 1.7%
Turquoise 13.0m 2.5% 1.4%
Turquoise 10.9m 2.1% 1.2%
Turquoise 6.9m 1.3% 0.7%
Turquoise 5.1m 1.0% 0.5%
Turquoise 2.4m 0.5% 0.3%
Turquoise 1.5m 0.3% 0.2%
Turquoise 1.5m 0.3% 0.2%
Turquoise 0.7m 0.1% 0.1%
Turquoise 0.7m 0.1% 0.1%
Turquoise Plato Block Discovery™
Turquoise reports all trades with real time transparency
Largest trades of all venues during the day matched via Turquoise
Sources: Bloomberg, Turquoise analysis.
Venues include: Turquoise, Borsa Italiana, Aquis, BATS
Trading Europe, Blockmatch, Chi-X Europe, Gettex, ITG,
Xetra, BME, Liquidnet, Sigma, EuroTLX, Euronext Lisbon,
Deutsche Boerse Tradegate, Euronext Lisbon.
Top 5
Share of
venues Traded ex auction Trading
BME 514.6m 51.2% 66.8%
Turquoise 100.1m 19.4% 19.2%
Chi-X 71.6m 13.9% 9.3%
BATS 36.5m 6.3% 4.7%
Liquidnet 34.5m 6.7% 4.5%
SANTANDER SA. (EUR), 16 March 2018 excluding auctions. LIS = ESMA’s Large In Scale.
15.6m trade at 14:13:43
Largest on order book trade of the day
6.9m trade at 08:34:44
Significant liquidity available in morning
2015 Turquoise wins Financial News Award for Excellence in Trading and Technology Most Innovative Trading Product / Service
2016 The Partnership between Turquoise + Plato https://www.lseg.com/markets-products-and-services/our-markets/turquoise/turquoise-video-resources/partnership-turquoise-plato
2017 Turquoise wins The TRADE’s Leaders in Trading Award for Outstanding Block Trading Venue
2018 Industry behaviour evolving under MiFID II https://www.thetradenews.com/multimedia/robert-barnes-lseg-turquoise-industry-behaviour-continues-evolve-mifid-ii/
This illustration shows the prices and sizes of trades by investors on 16 March 2018. Investors are trading shares
of Spanish company, Santander, on multiple electronic order book trading platforms, including BME, the primary
listing exchange, Bolsas y Mercados Españoles, and Turquoise, the European Multilateral Trading Facility based in
the City of London.
Turquoise trade prices are similar to those of the primary Stock Exchange, and Turquoise trade sizes serve both
the smallest and largest orders through its single connection for straight-through processing from trading in
London to settlement into Spain. In this example, Turquoise enables investors to access more than 19 per cent
and more than 100million of all order book values traded that day. Turquoise matched the top ten largest
orders traded of all venues during the day via its award-winning electronic block trading innovation Turquoise
Plato Block Discovery™. The largest single order book trade in this example is 15.6million on Turquoise.
This compares well with average sizes across other European order book venues, which are approximately
0.01million per trade. By trading larger size on Turquoise, investors can achieve significant liquidity, and the
brokers that serve them also may save post-trade costs where costs relate to number of trades.
Winning Financial
News Award for


This article was sponsored by Turquoise Trading. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from The Rt Hon Theresa May MP.

The Rt Hon Theresa May MP's Foreword For The Parliamentary Review

By The Rt Hon Theresa May MP

This foreword from the then Prime Minister appeared in the 2018/19 Parliamentary Review.

British politics provides ample material for analysis in the pages of The Parliamentary Review. For Her Majesty’s Government, our task in the year ahead is clear: to achieve the best Brexit deal for Britain and to carry on our work to build a more prosperous and united country – one that truly works for everyone. 

The right Brexit deal will not be sufficient on its own to secure a more prosperous future for Britain. We also need to ensure that our economy is ready for what tomorrow will bring. Our Modern Industrial Strategy is our plan to do that. It means Government stepping up to secure the foundations of our productivity: providing an education system that delivers the skills our economy needs, improving school standards and transforming technical education; delivering infrastructure for growth; ensuring people have the homes they need in the places they want to live. It is all about taking action for the long-term that will pay dividends in the future.

But it also goes beyond that. Government, the private sector and academia working together as strategic partners achieve far more than we could separately. That is why we have set an ambitious goal of lifting UK public and private research and development investment to 2.4 per cent of GDP by 2027. It is why we are developing four Grand Challenges, the big drivers of social and economic change in the world today: harnessing artificial intelligence and the data revolution; leading in changes to the future of mobility; meeting the challenges of our ageing society; and driving ahead the revolution in clean growth. By focusing our efforts on making the most of these areas of enormous potential, we can develop new exports, grow new industries and create more good jobs in every part of our country.

Years of hard work and sacrifice from the British people have got our deficit down by over three quarters. We are building on this success by taking a balanced approach to public spending. We are continuing to deal with our debts, so that our economy can remain strong and we can protect people’s jobs, and at the same time we are investing in vital public services, like our NHS. We have set out plans to increase NHS funding annually by an average by 3.4 percent in real terms: that is £394 million a week more. In return, the NHS will produce a ten-year plan, led by doctors and nurses, to eliminate waste and improve patient care.

I believe that Britain can look to the future with confidence. We are leaving the EU and setting a new course for prosperity as a global trading nation. We have a Modern Industrial Strategy that is strengthening the foundations of our economy and helping us to seize the opportunities of the future. We are investing in the public services we all rely on and helping them to grow and improve. Building on our country’s great strengths – our world-class universities and researchers, our excellent services sector, our cutting edge manufacturers, our vibrant creative industries, our dedicated public servants – we can look towards a new decade that is ripe with possibility. The government I lead is doing all it can to make that brighter future a reality for everyone in our country. 

British politics provides ample material for analysis in the pages of The Parliamentary Review 
The Rt Hon Theresa May MP
Prime Minister