Stock exchanges link up with new system

Stock exchanges link up with new system

Published: July 7, 2014

SEE Link will develop a single order-routing platform for Bulgarian Stock Exchange, Macedonian Stock Exchange and Zagreb Stock Exchange.

A project to build a single order-routing system for three Southeastern Europe stock exchanges should encourage greater levels of investment in the region.

The SEE Link initiative, expected to go live during the first half of 2015, will introduce a shared system for the Bulgarian Stock Exchange, the Macedonian Stock Exchange and Croatia’s Zagreb Stock Exchange, allowing brokers to access the three markets via the same platform.

“It’s a significant step,” says Ivan Steriev, chief executive of the Macedonian Stock Exchange. “We believe this project will increase the visibility of our markets and will make them more attractive for foreign portfolio investors not only within the region but hopefully outside of the region as well.”

The exchanges are providing €80,000 (about US$108,700) to capitalise the business, which is being run from the Macedonia capital of Skopje. In addition, the European Bank for Reconstruction and Development announced this week that it will provide a €540,000 grant to back the project.

Ivana Gazic, president of the management board of the Zagreb Stock Exchange (pictured at the EBRD signing ceremony), says that SEE Link should make life easier for investors who were discouraged from investing in regional exchanges by the need to establish multiple accounts.

“Whenever you go abroad and present your market to customers or potential investors, they always ask why [regional exchanges] don’t make some sort of connection,” she says. “We have a number of foreign investors in Croatia and they would maybe consider investing into other countries in the region – however, they’re rather small and the cost for establishing and managing the accounts are rather high.”

At the Bulgarian Stock Exchange, chief executive Ivan Takev (also pictured) tells EMEA Finance that the new system will bring member markets closer together without calling for any complex integration.

“The platform is an order-routing platform, which means it will not require replacement of existing trading platforms at the three exchanges,” he says. “That’s the best of both worlds – we’ve linked markets and at the same time they’ll continue to use their own platforms... Our members will be able to trade on the exchanges without having to replace their existing trading systems.”

And if the project is a success when it launches next year, Gazic expects other regional exchanges to join the three founders. “Our idea is not to have only these three stock exchanges,” she says. “We think it will be less complex to have only three parties making the structure and establishing how this is going to work, but after that the plan is definitely to include other exchanges.”