Smart Order Routing

In general, best execution is related to the investment firm's responsibility to execute orders in the best possible way for the client. The process to do this should be specified in the firms best execution policy. Nasdaq Nordic's service offering, whereby orders can reach other venues trading Nordic shares where there could be potential price improvement, is a way of enhancing execution. However, best execution is always the responsibility of the investment firm executing the order for its customer and the policy needs to reflect the execution possibilities.

Real-time (best bid/offer) BBO from supported MTFs and regulated markets are not available in Nordic Workstation. There are already third-party vendor products out there supporting this. Many front-end solutions have also consolidated integrated market data.

The costs for settling trades at EuroCCP (or any other chosen CCP) that are routed away from Nasdaq Nordic are the same as if the trades are executed at any of the Nasdaq Nordic exchanges.

We have an integrated application process for the service. It is possible to complete the application and approval process within two days. Please contact your local key account manager for details.

An order eligible for routing can be entered in the Nordic Workstation or via the FIX protocol. Default configuration at order entry is always "BOOK", which means no order routing. If you want the order to be routed, you must actively instruct so at order entry or apply a default strategy on your FIX port.

In December 2015, OMXS30, OMXH25 and OMXC20, as well as other CCP-cleared stocks, traded on away markets, including Oslo shares listed on First North Sweden. Information on order books accessible for routing is available via public market data services, GCF-TIP.

We route out based on best price. If there are multiple venues with the same price, we route to the venue displaying the largest volume. If needed, the routable order is split between multiple venues and sent in parallel.

There are multiple strategies available. Strategies where orders can route out again based on change in market data is one example (reactive). We also offer strategies where the member can target primary markets/MTFs only and/or Nordic@Mid. Certain direct strategies are offered via Nasdaq Exchange and Clearing Services AB.

The constructed mirrored trade between the member and the Introducing broker is seen as on-exchange (on respective Nasdaq Nordic Exchange), but the origination of the trade is possible to distinguish by examining the FIX message in TAG 9882 (LiquidityFlag). The code in that field displays the origination of the trade. This field is available in the FIX drop as well. It is possible for the member to see that the routed trade was originally executed on Chi-x.

Routing logic does not add any measurable additional latency when trying to match in the Nordic orderbook. There is no time difference between a routed or standard Nordic order pinging the book.

When routed out to an away market in London, the major part of the extra latency is explained by the physical distance between Stockholm and London. Nasdaq Nordic constantly monitors the latency and works towards minimizing this on a continuous basis.

Orders and Market data use the Nasdaq Low Latency connection – NODE for the service.