Pre-trade Transparency

Pre-trade transparency refers to the trading venue's obligation to disclose available bid and ask orders. This not only includes the price and volume of the best bid and ask orders but also of the four next best price levels.

While Swiss law stipulates pre-trade transparency for shares only, European regulation covers other asset classes such as ETFs, structured products and bonds.

The obligation for trading venues to publish pre-trade information can be waived for:

  • Reference price systems;
  • Systems that exist only to formalize transactions already negotiated;
  • Orders held in an order management facility of the trading venue pending disclosure;
  • Orders that are large in scale compared with normal market size.  

MiFID II further grants exemptions and reliefs for certain price discovery mechanisms (e.g. quote driven systems) and illiquid instruments.

Our approach

In line with the different provisions for different asset classes and price discovery mechanisms, different solutions are pursued for the various trading segments and services at SIX Swiss Exchange.

SSX trading segments Publication of market depth 5 order book data
Equities Full depth already available - no change
ETF / ETSF / ETP / SF / SFS / IF Existing functionality - no change
CHF / Non-CHF Bonds Existing functionality - no change
Structured Products Top-of-book data only - no change
Service / venue Publication of market depth 5 order book data
SLS No pre-trade transparency - applying for Reference Price (mid-point) and Large In Scale pre-trade transparency waivers. No technical change.
SCB No pre-trade transparency - applying for "hybrid" price discovery mechanism and/or Large in Scale pre-trade transparency waivers. No technical change.
XBTR No pre-trade transparency - no change

We believe the approach outlined is fully compliant with Swiss law and aligned to the principles of EU law but is subject to regulatory approvals. Implementation is scheduled for SMR7 (2017).

 

Swiss Regulation

European Regulation

Q&A