Cboe set to shake up east European stock markets


Cboe Global Markets Inc. is looking to shake up stock-market pricing when it starts handling shares of Polish, Hungarian and Czech companies next month in a move breaking up near-monopolies among eastern Europe’s largest exchanges.
Cboe, the largest share-trading platform in western Europe since the acquisition of Bats Global Markets in 2017, has been meeting local brokerages in the eastern part of the region in preparation for starting business there November 5. The move, triggered by demand from Cboe’s existing and potential clients, is also aimed at pushing the Warsaw, Budapest and Prague bourses to cut their charges to ease order execution, especially for deals abroad.
Cboe plans to lure traders of eastern European stocks by offering the same fees that it charges elsewhere, at about 0.2 basis point of order value. That compares with rates as high as 2.9 basis points at the Warsaw Stock Exchange, which in July also introduced fees for obtaining local market data when using other trading platforms. Those extra rates, aimed at brokers offering automated trading, multilateral-trading facility platforms or systemic internalizers, can amount to as much as 1.15 million zloty ($307,000) a year. Cboe sees such fees as intended to discourage local traders from switching to competing new venues.
“We hope that our offer will create market pressure on the local exchanges,” so “that’s why we are meeting with brokerages in the region to present them our solutions,” Mark Hemsley, head of Cboe Europe, said in an interview. “We also believe such anti-competitive impediments by the local exchange may be questioned by the European regulators as contractual terms that hinder best-execution policy.”
The Warsaw Stock Exchange said that, as a regulated market, its fees reflect the cost of acquiring new issuers and monitoring trades to prevent manipulation. The new charges “correspond to the economic value of such data, especially as we have already new clients” who have agreed to the rates, said Pawel Lasiuk, a spokesman for the Polish bourse. “The liquidity and the simultaneous cheap access and relatively cheap market data to other European and US markets may lure local brokers and investors,” Dariusz Gorski, an analyst at Santander Bank Polska SA brokerage, said.

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