Sweden’s OM Group will launch its new electronic stock market, Jiway, on November 17.
OM Group of Sweden, which is currently struggling to take over the London Stock Exchange, will launch its new electronic stock market, Jiway on November 17. The new venture, which last week was officially recognized by the FSA, is 60% owned by OM Group and 40% by the investment bank Morgan Stanley Dean Witter.
Jiway, a trading platform giving brokers access to multiple exchanges, claims its system will revolutionize trading in equities, arguing that the rise in traded volumes over recent years prompts the need for more modern ordering and clearing systems. Following a rollout period, the electronic stock market will eventually offer stocks from the Amsterdam, Frankfurt, London, Milan, and Paris stock exchanges, as well as the Nasdaq, the New York Stock Exchange and Stockholm (which is owned by OM Group). Around 6000 listed stocks will be on offer.
If operations commence successfully, November 17 marks the date when US and European markets will be reachable through a single interface. The system will allow brokers access to both execution and settlement facilities. However, perhaps the biggest advantages will be in cost and time savings for the user. The company claims it will cut costs in half for most international trades and that time requirements will also be significantly reduced.
It is an ironic twist, then, that it is Jiway that has impaired the OM Group’s chances of successfully taking over the LSE. The high setup costs of the ambitious venture have given the group’s profitability and share price a knock, reducing the value of OM’s partly share-based offer.
Nevertheless, it seems Jiway has great potential to shake up the equities trading market with over 30 brokers signing up prior to the launch. Whilst it is hard to say exactly what will happen in this area, Jiway officially predicts that within two years 50% of all cross-border online trades in Europe will be executed through its systems.
