NYSE Euronext and BIDS Holdings, on Thursday, launched their joint venture, the New York Block Exchange, a new platform designed to maximize access to liquidity and improve execution quality in the U.S. equity block trading market. Institutional investors and other market participants can now execute block trades on NYBX, the first venue of its kind to allow non-displayed liquidity to anonymously access both the displayed and reserve liquidity of the NYSE order book, creating a platform to re-aggregate blocks of stock.
“Given the speed and complexity of today’s dynamic marketplace, there is a need to resolve the problems inherent in executing block trades in an increasingly fragmented trading environment,” said Larry Leibowitz, group executive vice president and head of U.S. execution and global technology, in a press release. “As the first platform to unite dark and light sources of liquidity, NYBX will significantly reduce market fragmentation for large orders; electronically replicating traditional block trading. This represents a major advancement in block trading,” he said.
“Today’s launch of NYBX marks a historic shift in the way market participants can execute block trades, representing a leap forward in the institutional trading environment,” said Tim Mahoney, chief executive officer of BIDS Trading, in the release. “Previously, there had been a gap in electronically servicing block trades and we see NYBX as the most efficient trading solution. By combining the anonymity, speed and flexibility of the BIDS ATS with the world’s leading exchange, NYBX aims to improve block executions, provide unparalleled price discovery, and reduce fragmentation; giving traders a one-stop block trading service,” he added.
BIDS Holdings and the NYSE Euronext each have a 50% ownership stake in NYBX. In addition, NYSE Euronext made an investment in BIDS Holdings in October 2006.