Barclays launches a new single dealer equity platform to be hosted by Nasdaq

Darren Sinden

This the first time that FinanceFeeds can recall that a bank has openly allowed a third party to host a trading platform and it’s more remarkable for the fact that the third party host is a competitor to the platform.

Barclays FX

Barclays, Britain’s last remaining investment banking business, has launched a new equity trading platform in collaboration with the US Nasdaq exchange.

The new single dealer platform is called BARX Book For Equities and will be hosted by Nasdaq. BARX Book will provide the banks, institutional clients, with access to Barclays principal liquidity, in US single name stocks and ETFs.

Nasdaq will host the Barclays trading system within its Nasdaq Execution Platform and will manage the systems operations, some elements of risk control and surveillance, as well as trade reporting and what was described as clearing facilitation.

Barclay’s Co-Head of Global Equities Tod Sandoz said that “Our partnership with Nasdaq to host the platform further allows us to focus on offering the most advanced liquidity solutions, which are backed by the scale and depth of Nasdaq’s growing Execution Platform infrastructure.”

Whilst Nasdaq’s Valerie Bannert-Thurner, VP and Head of Sell-Side and Buy-Side Solutions, Market Technology said that “Our extensive experience in regulated markets, coupled with delivering high-performing, scalable technology infrastructure, will provide Barclays with unique functionalities so they can focus on building and evolving BARX Book for Equities. We look forward to supporting Barclays as they continue to innovate their single dealer platform.”

Beyond the usual platitudes and pleasantries, the deal between Nasdaq and the UK bank is the latest in series of joint ventures between financial institutions and technology providers, for example, we recently wrote about the collaborative partnership between Deutsche Bank and Google Cloud.

The symbolism of the partnership with Nasdaq is probably more important than the BarX Book platform, after all, there is no shortage of execution venues and exchanges in US equities trading.

In a quick search, we found 36 and there are probably more. However this the first time that FinanceFeeds can recall that a bank has openly allowed a third party to host a trading platform and it’s more remarkable for the fact that the third party host is a competitor to the platform.

Barclays, of course, has let it be known that its has ambitions to boost its share of the investment platform market at a retail level too, and has set its sights on the likes of Hargreaves Landsdown.

The bank wants to expand its Smart Investor platform to allow retail customers and private investors to trade in stocks shares, ETFs, managed funds and other products.

Smart Investor has seen a 230 % growth in customer numbers during 2020 as people with time on their hands take control of their finances and look for better returns than are available in traditional savings and deposit accounts. Barclay’s target customers are those with a minimum of £5000 to invest.

This top-down and bottom-up approach has been tried by the bank before but perhaps it has a better chance of success in the current low-interest-rate environment, which has seen US equity indices regularly make new highs in the second half of the year.

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