Despite recent delays to its planned launch, Project Turquoise, the multilateral Pan European trading facility established by a consortium of banks, is on its way to a 2008 launch with its CEO and CTO in place and two new partners.

Eli Lederman assumed the CEO spot on Dec. 1, 2007, while two French banks — BNP Paribas and Societe Generale — were the latest to sign on to the Project Turquoise roster. Lederman previously was a managing director in Morgan Stanley’s sales and trading group, where he focused on the firm’s European electronic trading business for equity and fixed-income products.

Lederman says first and foremost Project Turquoise is a project no longer and will officially be known as Turquoise. “We’ve transitioned from being a project undertaken by a consortium of banks to being a well-capitalized entrepreneurial start-up that has those banks as shareholders,” he says.

Lederman says that Turquoise is well on its way to production, with the technology supplier chosen, the new CIO in place and work being done. “”We expect to begin testing in the middle of 2008 and go live at some point in the summer,” he adds.

Turquoise will be taking a buy and integrate approach to its technology platform, says Lederman, with Cinnober Financial Technology selected to supply the trading platform technology. The newly appointed CTO, Yann L’Huillier, who previously was CIO at the Boston Stock Exchange, will be charged with overseeing the integration work.

“He has explicit experience doing this and has very strong project management skills,” says Lederman. “We’re building a project management organization within Turquoise to make sure we have spec’d everything out in the right level of detail and we are hitting the milestones as they happen.”

Lederman explains that Turquoise will feature both a conventional displayed order book as well as a dark pool for anonymous orders. “It will also be possible for the dark orders to meet the light orders,” he says. “It’s important because it gives us the opportunity to attract small order flow, which is an important attractor of liquidity. But at the same time we want to have a facility for larger orders and the liquidity they represent as well.”

Turquoise also will be based on a rebate model, or “taker-maker structure,” as Lederman says. “Experience has shown that if you give economic incentives to people that add liquidity, they will migrate from one platform to another with better economics.”

As for the shareholder bank partners, Lederman says they have committed to being connected to Turquoise from Day One and have smart order routing in place. “Banks will always be obligated to best execution for their client business, but where possible we would expect that the banks will direct business preferentially to Turquoise,” says Lederman.

He adds that there will be market-making obligations among the shareholder banks, although he could not share what those numbers potentially will be. “The banks have agreed to do this and it’s very important to have liquidity from the outset,” Lederman says.

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