To facilitate the trading of large blocks of shares with additional pre-trade anonymity, the Johannesburg Stock Exchange (JSE) has introduced new functionality within their Central Order Book called Block X. Two hidden order types have been introduced and made immediately available to Peresys Hermes users that wish to trade in South Africa's first "dark pool" now that the functionality has been released by the exchange.
Hermes, a trading system that facilitates proprietary trading, routing and management of orders, is fully geared to handle the new Block X transaction types. All orders received from institutional and retail clients are processed electronically with the appropriate exchange counter party via an electronic interface to the exchange matching system.
Anti-gaming mechanisms will be used to enforce "hidden" minimum order sizes (MOS) or LOT (Larger order threshold) and will be determined by the JSE and governed by their trading engine.
The Hermes system architecture is based on distributed technology that provides a flexible, scalable and functionally rich trading solution - this made it possible for Peresys to conform to the JSE standards swiftly, even before the functionality was released.
Through public and private API's (application programming interfaces), Hermes also offers an open interface to allow integration with 3rd party trading systems, including program trading applications, as well as back-office and risk management systems.
Coupling these features with Peresys' local support in Johannesburg and Cape Town, clients will have no trouble using the new order type mechanisms that are easily accessible from their existing Hermes Market Order screens.
In addition to falling in with the JSE standards, Peresys Hermes users wanting to trade on Block X can expect the following rich features when upgrading to the latest version:
Order qualification alerting
Hermes indicates if your order qualifies for Block X by displaying an alert in your normal Market Order window.
Parked order notification
Hermes notifies you when new orders are parked in the message window as a result of zero offers in the market.
Auto pilot for order suspension
Hermes will automatically suspend orders where they no longer meet the Minimum Order Size (MOS). So, after a partial trade you can edit your order and make it visible again.
Indicative order advice
Hermes will give you an indicative Minimum Order Size (MOS) before you make your move and execute your trades.