A group of seven global investment banks have agreed to establish a
pan-European equities trading platform that will compete head-to-
head with the region's domestic stock exchanges following the
introduction of the EU's Markets in Financial Instruments Directive
(MiFID).

The group, comprising Citigroup, Credit Suisse, Deutsche Bank,
Goldman Sachs, Merrill Lynch, Morgan Stanley and UBS, will be
shareholders in a new company, which will have its own independent
management team.

In a statement, the consortium says that equity trading is the
region is concentrated on a number of domestic stock exchanges.

Currently EU rules require all trades to go through a stock exchange
but MiFID will enable banks to trade shares internally - off-
exchange - although they will be required to publish the prices of
intended trades to the rest of the market beforehand.

"We are responding to the MiFID legislation by creating an
integrated pan-European trading platform where equities can be
traded more cost effectively, obtaining significant liquidity with
greater efficiency for each and every participant in the equity
markets," says the statement.

The consortium says it has already committed people, cash and
resources to develop the project and has already begun meetings with
European regulators.

The group will also be contacting other financial institutions over
the coming weeks to encourage them to use the new platform when it
is launched.

The banks backing the project are entering an already crowded market
with Instinet and new venture Equiduct also preparing launches.

Bob Fuller, CEO of Equiduct, comments: "It's interesting that
they've decided to go down the MTF ­ multi-trading facility ­ route,
rather than opting as Equiduct has done to set up as a fully
regulated pan-European electronic platform. This, coupled with our
open access to clearing and settlement providers, gives us a
distinctive proposition. We'll also be interested to see how the
European marketplace relates to an offering owned by a small number
of Tier-1 banks."

It was also reported earlier this week that US investment bank
Goldman Sachs is gearing up to launch an off-exchange automated
trading platform, dubbed Sigma, that will provide its European
clients with access to dark liquidity pools.

Ealier this year a group of nine investment banks - consisting ABN
Amro, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC,
Merrill Lynch, Morgan Stanley and UBS - agreed that they would pool
their trade transparency data and create a pan-European platform for
the collection and sale of trading data that will bypass those
operated by exchanges in the region.