28 January 2008

Telegraph: Turquoise moves closer to launch

Secondary trading platform Project Turquoise is to move a step closer to launching after choosing partners to offer a real-time trading surveillance system.

The announcement, expected as early as today, will see Turquoise confirm it is to work with Progress Software and Detica to provide surveillance data to root out trading irregularities, spot breaches of trading rules and deliver detailed analysis of trading on the platform.

The platform, originally devised by seven banks including Merrill Lynch and Goldman Sachs as a rival to traditional European exchanges including the London Stock Exchange, is already facing delays having originally expected to be up and running in November 2007. However it is now expected Turquoise will be testing in mid-2008 and is expected to go live at some point over the summer.

The original date seemed ambitious, particularly as the project was leaderless until former Morgan Stanley banker Eli Lederman joined as chief executive on December 1. Mr Lederman last week declared Turquoise is "a project no longer", saying it has transitioned from a project to a "well-capitalised entrepreneurial start-up".

Cinnober Financial Technology has been chosen to supply the technology.

The project welcomed BNP Paribas and Société Générale to its shareholder base in December, taking the number of investment banks backing the project from seven to nine.

The aim of the platform is to take advantage of the European Union's Markets in Financial Instruments Directive (MiFID), which came into effect in November, to create a multi-trading facility (MTF). MiFID allows for the creation of such MTFs, as domestic trades will no longer need to be reported on domestic exchanges.

The original plan involved running Turquoise as a not-for-profit utility with any savings passed on to users, which will potentially include private client brokers and other investment banks. The overall aim is to reduce the cost of trading for the banks.

By James Quinn Wall Street Correspondent

© The Telegraph