NeoNet, a global DMA agency broker, announced it has connected to Chi-X, its first link to a European alternative trading system (ATS)."As MiFID unfolds we'll continue to connect to any and all destinations that garner liquidity, that's what we need to do," says Greg Treacy, senior vice president and director of sales at NeoNet. He adds that the Chi-X connection builds on the firm's goal to provide broker-neutral global best execution to clients in the new MiFID environment.
The Chi-X connection builds upon NeoNet's existing connections to 25 global exchanges, but this is the first connection to a multi-lateral trading facility (MTF) in Europe.
With the Chi-X addition, clients will have the option to either route directly to Chi-X or through NeoNet's smart order routing it will be included in the best execution destination options.
Treacy explains that NeoNet is also offering new order types and tools to coincide with MiFID. The Exhaust and Spray orders have the ability to hit multiple pools simultaneously, he says.
"The speed component to these is good for some clients and they can determine what percentage they want to spray to certain venues," says Treacy. "It allows clients to be more sophisticated in terms of accessing liquidity across multiple markets."
Ultimately though Treacy says the outcome of MiFID will only unfold in the next 12 to 18 months. "People are trying to transpose what happened in the U.S. to Europe but it will probably take some time until liquidity begets liquidity for the competing venues to gain traction," he says.
"There's also the thought that Europe is one market, but really it is a confluence of 20 plus markets and is more complicated than the U.S. in that regard," Treacy explains. "What may work for one market may not necessarily translate for another within the continent."
He adds, "The key to MiFID as it unfolds is not so much about taking liquidity, but also who is willing to add liquidity to the venue. The more people add liquidity the more people will be taking from there."