RFQ

The aim of the RFQ function is to offer to all the market members a fast and efficient way to find on-exchange (but off-book) counterparties for large-in-scale trades.
Institutional clients, interested in trading a large-in-scale volumes on exchange at the best price, can use this functionality to make dealers compete among each other.
Institutional clients – normally operating OTC – can thus receive on a dedicated channel proposals of price and quantity that dealers do not normally expose on-book to avoid arbitrage or scalping.

The RFQ functionality offers members with a range of benefits, which include:

• Consolidation – large transactions benefit from a dedicated on exchange functionality. Borsa Italiana’s RFQ trades are reported and consolidated within exchange volumes
• Efficiency – the RFQ functionality is integrated within Borsa Italiana’s trading platform, allowing all members to access it. Active dealers and prospect dealers have the ability to provide quotes to RFQ requests
• Integrated post trading - RFQ trades are automatically cleared and settled in the same way as on-book trades
• No counterparty risk - Euronext Clearing covers RFQ trades
• Competitive pricing – institutional clients interested in trading in large-in-scale volumes on exchange, at the best price, can use this functionality to ensure competitive prices as dealers compete against one another

The negation process for the RFQ functionality involves four simple steps:

1. A member can request quotes by sending an RFQ request to the eligible Market Makers;
2. Enabled Market Makers, who receive the request, can accept the request by sending a quote. The quote can be continuously refreshed;
3. To execute the trade, the Requestor can only send a new order with a limit price: the order will be matched with the best price considering MM and book prices:

The trading characteristics and operating rules of RFQs are as follows:

• Guaranteed by Euronext Clearing (where provided)
• Settlement in T+2 in Euronext Securities Services Milan
• RFQ trades are considered as “On Exchange” trades
• RFQs trades are made available to the public in real time, and do not contribute towards the formation of any price statistic (dynamic price, reference price or official price)
• Pre-trade transparency handled according to MIFID II rules
• Post trade transparency and transaction reporting are automatically fulfilled
• RFQ trades are accounted for the total volumes of the relevant instrument

Pricing

RFQ is totally free of charge for the requestors for all the RFQs with a countervalue more than €100,000.
All the other ones costs €1 per trade.
Market Makers pays proportionally €10 per million (for example an RFQ with a countervalue of €50,000 costs €0.50).

RFQ Market Makers on ETFplus

• BANCA SELLA HOLDING
• FLOW TRADERS
• MEDIOBANCA
• SSW-TRADING GMBH
• SUSQUEHANNA INTERNAT
• VIRTU FINANCIAL IRELAND