Fidelity Launches ATS

Ivy Schmerken, Wall Street & Technology

Fidelity Capital Market Services, a unit of Fidelity Brokerage Company, has launched CrossStream, an alternative trading system (ATS) that anonymously matches brokerage clients' buy- and sell-side orders against the diverse order flow of the agency brokerage house. The new ATS will not publish bids and offers before client's orders hit the Street, according to yesterday's announcement."In today's competitive environment, keeping intentions private is critical to a firm's ability to minimize the market impact of their trades, while also improving execution quality," stated Mark Haggerty, president, Fidelity Capital Markets Services. "CrossStream is a completely anonymous platform designed to let firms source liquidity with zero information leakage," stated Haggerty in the release.

As a non-quoted, non-displayed ATS, according ot Haggerty, the new platform can help clients trade large blocks of stock with less impact than would be likely in the public markets.

Fidelity's CrossStream adds to the number of dark pools announced by Wall Street firms in the past year, including those of Credit Suisse, Lehman Brothers, Merrill Lynch and Morgan Stanley. But Fidelity expects to draw upon the aggregated liquidity of one of the industry's largest brokerage firms with $1.6 trillion in assets under administration, 16.6 million client accounts and $3 billion of equity trades per day to help institutional and retail brokerage clients find a natural match.

"CrossStream is designed to offer our clients access to Fidelity Brokerage Company's significant order flow," stated Haggerty, in the release. The firm services millions of individual investors, 1,000 institutional firms, 350 correspondent broker-dealers and 3,200 registered advisors, according to the release.

Because the firm is an agency brokerage, "users can be confident that their trading intentions will be private and that Fidelity Brokerage Company does not employ any competing proprietary trading strategies," stated Haggerty. CrossStream is running on advanced technology developed by Fidelity and will offer a range of order types, including market-limit, pegging, discretion and minimum/maximum order quantity.

The ATS is designed to increase fill rates for users by providing access to both large, liquid securities that can be moved in bulk and a wide range of smaller, less-liquid issues that can be difficult to trade in the public markets, the release stated. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio