Electronic Trading Venue Peers

Electronic trading venues are autonomous and equal in their basic functionality providing a platform for trading of stocks, where prices are generated and transactions are performed. They can be seen as peers. Electronic trading venues in the United States are linked together through the central National Market System (NMS) and a set of rules enabling communication on this network, the Regulation NMS. Although in Europe regulation is not forcing the linkage of venues, regulatory actions encourage the development towards a single European capital market. One already established mechanism among European trading venues is the reference price principle. In this conceptual work, a peer-to-peer network of trading venues is presented together with economic algorithms enabling communication among peers as a decentralized alternative to a central market system aiming at integration of venues.