Jeuj gewonnen!This Wednesday there was a decision in the Court of The Hague in the never-ending story of lawsuits of Euronext against TOM. It’s a long read, but if it’s your thing you can find the (Dutch) ruling here.

Very confusing. Both exchanges claimed victory. To me it seems like a draw. To cut a long story short, Euronext won a few points. But almost all of these points are matters from the past. Nothing will change.

Database violation

All option classes and strikes are considered a database. In the past TOM just copied every option strike in every class. This is seen as a violation of database ownership. TOM is not allowed to do this anymore. However, TOM made their own strike policy a year ago.

AEX options

They can’t use AEX brand for the index options, but this has already been changed in XNL. Also Binck had to adjust this ticker code in the communication with the investors. The index options based on the AEX index are explicitly allowed. This could have been a disaster for TOM if court would have decided otherwise. Again, nothing new here.

Marketing claims

Finally, TOM has been bragging about best execution and best prices with their smart order router (SOR) in options. These claims don’t hold, so TOM needs to be a bit more modest about their best execution. Best execution becomes best effort. Anyway, nobody believed the story market makers would quote tighter option markets on TOM.

Ticker codes unchanged

In other words, TOM doesn’t have to change anything at all. TOM was allowed keep on using the regular Euronext ticker symbols with an extra T. Options on Ahold have the code AHT on TOM, compared with AH on Euronext. That’s a relief for TOM, as it would be a waste of energy giving every option class a new ticker symbol.

What’s next?

What’s next? Euronext has won a few points, but most of it has been changed early 2014. But given this court decision, Euronext has the right to seek compensation. But this compensation is not going to happen. It’s a long road of endless litigation. Could take years, and Euronext needs to provide evidence they’ve lost money due the issue. That’s almost impossible. 

HCH becomes ICE

Small other news. Trades at TOM are being cleared at Holland Clearing House. Used to be ABN AMRO, but ICE has bought a majority stake in the clearing. The name Holland Clearing House will be replaced by ICE. Although HCH doesn’t seem to know it yet.

DeGiro still not sued by Binck

DeGiro made a credible claim the SOR in TOM’s stock market routing wasn’t really working smoothly. High frequency traders (probably Virtu) could take advantage of the not-so-smart order router. Binck announced to sue DeGiro. Empty threats, because as predicted Binck is probably aware they would lose in court.

  • Press release TOM in reaction to court decision here (pdf)
  • Update : a nice overview of the claims and the timeline in a pdf from TOM (Dutch)