US alternative trading system AX Trading has launched a new tool letting sellers of large blocks of shares trade directly with the buy-side via an investment bank sponsor.
The DirectAX initiative gives corporate clients, private equity firms and venture capital firms access to institutional investors via their sell-side partners, with the aim of improving block trading opportunities. Sellers have the ability to set a minimum size and price threshold for their orders.
The new scheme is designed to appeal to buy-side firms looking for more meaningful block trading options as well as brokers seeking better access to long-only investors.
AX Trading, which is an auction-based trading platform, believes the tool will level the playing field for buy-side traders struggling to find large block liquidity in dark pools, while reducing market impact and improving execution for corporate clients.
“DirectAX extends our network to the corporate community, allowing companies to efficiently raise capital from leading institutional investors and allowing private equity and venture capital firms to monetise their public holdings,” said Kevin Callahan, CEO of AX Trading.
“The AX Trading Network is all about connecting equity market participants in a secure environment,” Callahan said.
AX Trading uses electronic, trader-initiated call auctions to protect buyer and seller trading intentions. Launched in November 2011, it crossed the one million shares in a month threshold in March last year.