Issue 27 - Smart order routing

Investment Technology Group (ITG)

ITG Smart Router uses a lowlatency routing infrastructure to access to a wide range of liquidity including its own dark pool, ITG POSIT. The SOR''s proprietary logic searches for best prices and minimises the risk of trade through. The offering is highly customisable and has the ability to harmonise underlying market microstructure. Execution quality research on a venue level is used to optimise execution.

Access and algorithmic integration

ITG Smart Router is available via the firm''s Triton execution management system (EMS) and numerous third-party EMS/order management systems. It is fully integrated within its algorithmic trading suite to ensure best execution.

Destinations

ITG Smart Router is available in North America and Europe and will be available in Asia in Q3 2011. It accesses all developed markets, many emerging markets and a vast selection of non-displayed liquidity sources. We add new venues based on client demand and relevance of liquidity.

Order types and client reporting

ITG Smart Router accepts all standard order types including day, immediate-or-cancel and fill or kill orders and also includes the ability to use discretionary orders.
ITG engages in full transparency of trading with our clients and compliance with best execution obligations under Reg NMS.

Data feeds

ITG Smart Router uses proprietary logic to maximise fill rates, minimise market impact and improve execution quality. This logic uses both real-time and historical data to accurately navigate the liquidity landscape.

Routing logic

Using an event-driven model, ITG Smart Router rapidly responds to the best price. Our environment has been designed in a load-balanced, risk-optimised way for optimal routing speed and throughput. ITG Smart Router focuses on best execution when determining how, when and where to route orders.
ITG production environments are fully redundant with seamless failover in the event of outage and clients are offered fully customised solutions.

Future plans

Over the coming year ITG will continue to optimise ITG Smart Router with industry leading execution quality research.