November 11, 2010

ITG and Instinet announced a reciprocal liquidity agreement that will allow each firm’s institutional clients to access multiple liquidity pools in Asia-Pacific.

The deal reflects the trend toward liquidity aggregation as well as the rapidly fragmenting Asia-Pacific markets., according to the release.

Joel Hurewitz, Instinet’s head of Asia-Pacific Sales – broker dealer and liquidity, said the deal was a further example of the firm’s global goal of helping clients seamlessly source liquidity. With Instinet recently having signed similar agreements in Asia with other major trading venue providers, Instinet clients can now access 11 alternative liquidity pools in Asia.

“We’ve been very aggressive in pursuing these kinds of linkages in Asia, as our goal is helping our clients get ahead of the fragmentation curve in Asia,” he said. “As a result, our clients are enjoying not only a significant increase in the amount of liquidity they can access, but also more interesting liquidity with which to interact in our pools.”

Instinet clients will use the firm’s Nighthawk liquidity aggregation algorithm — which allows a single order to access multiple non-displayed trading venues and includes venue analysis and anti-gaming logic — to access ITG’s POSIT pool in Hong Kong and Australia. ITG clients will access Instinet’s CBX Hong Kong through POSIT Marketplace. Nighthawk, whose logic is embedded in all of Instinet’s Execution Experts algo strategies reallocates orders to venues in which execution quality is highest, according to the broker.

Michael Corcoran, ITG’s head of sales and trading, Asia Pacific, stated in the release, the deal reflects the evolving trading landscape and supports ITG’s focus on lowering trading costs for its clients.

“The Asia Pacific trading environment is changing irreversibly. Finding liquidity and reducing costs are top priorities as the markets become more complex. With the recent addition of Australian trading through POSIT Marketplace and more liquidity pools joining the platform on an ongoing basis, our clients can benefit from higher fill rates and lower costs,” he said. “Accessing multiple, quality venues from a single point is key to keeping trading costs down in a fragmented market and we’re pleased to add Instinet’s CBX dark pool to the panel of venues within POSIT Marketplace.”

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