Daiwa Capital Markets, the investment banking arm of Japan's Daiwa Securities Group, has selected trading technology vendor smartTrade to underpin its dark pool and smart order routing platform.
Daiwa’s DRECT dark pool was launched last year and aggregates liquidity from the firm’s international clients base, which spans retail, corporate and institutional clients. The broker says the dark pool has a crossing ratio of 13% following steady growth since the platform’s launch.
DRECT has been tuned specifically for Japanese markets. Orders in the pool are prioritised on a price/size basis – rather than the typical price/time priority – which Daiwa says helps mitigate the infrequency of price moves in Japanese stocks, which can force traders to cross the spread frequently to avoid sitting in the queue.
Tech provider smartTrade said it was able to install technology for DRECT in eight months, up to four times quicker than it would have taken for Daiwa to build the system in-house.
Last year, Daiwa extended DRECT to offer routing between India's two main stock exchanges, the National Stock Exchange and the Bombay Stock Exchange, as part of an overall expansion to the service.