Cboe announces launch of new block trading service in Canada

Karthik Subramanian

Cboe Group, one of the largest market operators in the world, has announced plans to launch a new block trading service that would be powered by the BIDS system in Canada continuing its global expansion.

This launch is expected to happen in February 2022 pending regulatory approvals and would utilize the capabilities of the MatchNow and BIDS system to offer block-sized buy-side and sell-side liquidity for the market participants.

Cboe had acquired MatchNow in August 2020 and BIDS in January 2021 and would be utilizing the sell-side to sell-side block trading facility of MatchNow and combine it with the block trading system that BIDS provides to facilitate the buy-side and sell-side for block trades.

“We are excited to introduce the next chapter in the evolution of MATCHNow’s Conditionals offering with the launch of Cboe LIS powered by BIDS in Canada – which we believe could be an absolute game-changer for block trading in the region,” said Bryan Blake, Vice President and Head of Canadian Equities at Cboe Global Markets. “MATCHNow was an early provider of Conditionals in the region and has achieved tremendous success by serving investor demand. By tapping into BIDS’ technology and distribution network, we expect to drive even greater client adoption of Conditionals as the tool of choice for block trading and help grow the overall market to benefit Canadian investors.”

Cboe and BIDS began working together in 2016 to launch the LIS system in Europe which has steadily grown since then to become the largest block trading platform in Europe. It now does $450 million in average daily notional traded value which is a reported market share of 24.1%, the company said.

MatchNow was established in 2019 and has been building its volume steadily to achieve a monthly high of 17.4 million shares traded in March 2021 which represents around $576 million in notional value. It owns regulated and proprietary technology which is expected to power the upcoming block trading exchange in Canada. This would also mark Cboe’s expansion beyond the US and Europe and make it a truly global player.

Apart from the sales efforts, Cboe has also been pushing to extend its trading hours of the SPX and VIX instruments, which are two of the most traded instruments. It has also applied for approval for launching Bitcoin ETFs as it plans to bet big on the crypto industry. The company is moving quickly on expanding on various fronts as it gets ready to take on the challenges globally.

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