Efforts to block the growing impact of high frequency trading are flaring up — and not just in the United States. Earlier last week CA Cheuvreux, an agency broker owned by Crédit Agricole Group, with offices in Paris and London, relaunched its internal, broker-crossing network as a multilateral trading facility (MTF) that will aim to provide both institutional and retail clients in Europe with what Peacock calls “clean, pure, unpolluted liquidity." Translation: no high frequency traders welcome. The relaunched venue — called Blink — is being marketed to Cheuvreux clients as facilitating larger size orders and effectively blocking out all high frequency traders, even though technically, an MTF is a regulated market that anyone can access. It will offer trading in 1,700 stocks — mostly small and midcap — spanning 14 of the region’s markets.

The move comes as high frequency trading now accounts for 53 percent of total equity trading in the U.S. and 37 percent of the notional value of equity trading in Europe, according to the latest TABB Group numbers. It also comes at a time when regulators, gearing up for European capital markets-related legislation, known as Mifid II, continue to show signs that they are trying to restrict and possibly force HFT out of the market, a move that TABB Group senior analyst Rebecca Healey, based in London, views as potentially backfiring. “If HFT firms are forced out, the efficiencies they have delivered may well disappear, and the European markets run the risk of becoming substantially less competitive. And it will become harder and more expensive to trade.”

Institutional Investor contributor Katherine Heires spoke with Ian Peacock, CA Cheuvreux’s global head of execution services in London, to understand why the firm felt the need to launch and actively market a “No HFT” trading venue and what he expects the future will hold for the effort.

1. So why did CA Cheuvreux decide to relaunch Blink this month and market it to your institutional trading clients as a venue that specifically shuns high frequency traders?

When we talk to our institutional clients, many do not see high frequency traders as a good or bad force on the market. But they do have anxiety about what sort of liquidity they may be interacting with in a dark pool, and they know that they do not want to interact with high frequency traders. In Europe, as a result of Mifid I, we now have mass fragmentation of markets and an increase in high frequency trading. While many clients are not sure about the ultimate impact of high frequency trading, they know that the growth of it has caused the average execution size of trades to fall greatly, and they don’t like that. If you are an institution with a big order to buy or sell, and there are no blocks in the market, it is much harder to get your big trade executed. And the biggest fear is that someone — perhaps a high frequency trader — will figure out what you are doing or try to game their trade, and this will impact the market price. That’s why we’ve launched Blink, to provide clean, unpolluted liquidity for our clients.