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London Stock Exchange to launch midday auction

Friday 7th November 2014

The London Stock Exchange (LSE) has announced that it will be introducing a new intraday auction for all SETS equities, the largest and most liquid shares traded on its markets. 
During the two minute auction, which will take place at 12.00 every day, continuous trading of shares will be paused on London Stock Exchange.
The intraday auction will go live in late 2015, giving market participants the opportunity to update and reconfigure their own systems. 
Brian Schwieger, Head of Equities, London Stock Exchange said: “This is a very significant change to the trading day, following a detailed consultation with market participants. The introduction of the intraday auction is in direct response to demand from buy-side participants for neutral, infrastructure-led solutions for trading in large blocks. The auction will allow participants to place orders in a truly confidential, yet price-forming environment via a well understood mechanism.”
Schwieger says the 12.00 timing is based on market research and is set to match the current intraday auction in Germany. 
“We are aware that institutional investors hope it will encourage European markets to follow suit, creating over time a significant and harmonised pan-European focus for liquidity at midday across the continent,” he added. 
The auction process will be like that used in LSE’s opening and closing auctions. At the commencement of the auction call at 12.00, all orders that have been parked for that specific auction will be injected immediately. Orders may then be entered, modified and deleted during an auction call, but no automated execution occurs.
 The full results of the market consultation can be viewed here: http://www2.londonstockexchangegroup.com/e/6522/-exchange-notices-sen-home-htm/ykxkl/573292973.

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