The Order Machine (TOM)
|The Order Machine (TOM)|
|Products||Multilateral Trading Facility, brokerage|
The Order Machine, aka TOM, is an alternative trading system founded in 2009 as a joint venture between BinckBank and Optiver. It is located in Amsterdam. It was created as a challenge to NYSE Euronext's business, in particular retail banks.
TOM ranked 42nd by derivatives volume in 2017 with volumes of 8.9 million contracts, down 62.3 percent from 23.7 million contracts a year earlier, according to the annual exchange volume survey published by the Futures Industry Association (FIA).
The Order Machine reached its first million traded options contracts on October 11, 2012, 10 months after its launch. By April 2013, its market share in Dutch options was estimated at 20 percent. On August 16, 2013, TOM said it had processed its 10 millionth contract.
By 2013, the exchange ownership had expanded to five firms:
- ABN AMRO - purchased 25 percent share in July 2010
- IMC Group - purchased 9.99 percent share in March 2012
- NASDAQ OMX - purchased 25 percent share in December 2012, with an option to buy an additional 25.1 percent share.
In August of 2013 the company's CEO, Willem Meijer, told Bloomberg that TOM would aim for more than 50 percent of market share in index options in 2014.
In January 2013, TOM began listing options based on NYSE Euronext’s benchmark AEX Index (AEX) for Dutch stocks. In April 2013, NYSE Euronext' LIFFE sued TOM, claiming the alternative trading system violated LIFFE's intellectual property rights by not obtaining a license to list options based on the AEX. In July of 2013 a court ruled that TOM infringed NYSE Euronext's trading rights, and as a result TOM changed its ticker symbols for options based on the AEX.
In August of 2014 ABN Amro said it would direct all its equity options retail flow to TOM starting in September. The bank said it would route all retail trades through TOM's Smart Order Broker platform to execute trades on TOM or Euronext based on where the best price is to be found. TOM had been seeking such a deal with ABN Amro for a long time. ABN Amro Clearing Bank has been a shareholder in TOM since 2010.
Willem Meijer stepped down as CEO of TOM on September 1, 2016. He was with the company since its creation in 2009. During those seven years, TOM gained 40 percent market share in the Netherlands.
TOM is composed of two entities:
- TOM Smart Execution is a brokerage entity offering smart order routing.
- The exchange, "TOM MTF" is a MiFID-compliant Multilateral Trading Facility.
- Henk Wim van Arem, chief operating officer
|Year||Total Annual Volume||Percent Change|
- The Order Machine, New Alternative Trading System, Seeks Start. Bloomberg.
- Euronext to move derivatives clearing business from LSE to ICE. Financial Times.
- Press statement TOM wind down. TOM.
- 2017 Annual Volume Survey. FIA.
- Liffe Sues Dutch Options Market TOM Over AEX Products. Bloomberg.
- The Order Machine Processes 10 Millionth Options Contract. Bloomberg.
- TOM welcomes NASDAQ OMX as shareholder. The Order Machine.
- NYSE Euronext sues Tom. Financial Times.
- ABN to send retail equity options flow to TOM. FOW.
- Willem Meijer to step down as CEO of TOM. TOM.
- TOM Smart Execution becomes a member of Eurex. TOM Group.