Goldman Sachs, Morgan Stanley and UBS have struck a series of bilateral agreements that will allow their respective clients to access the banks’ non-displayed liquidity pools.
The arrangements allow orders generated by the firms’ execution algorithms to interact with the US equity liquidity found in Goldman Sachs’ SIGMA X, Morgan Stanley’s MS POOL and UBS’ PIN ATS.
With the initiative, the banks are aiming to make it easier for their clients to trade in the fragmented US market.
“We’re confident that providing our respective clients access to each other’s liquidity will achieve even better crossing results for our clients in an increasingly fragmented market,” said Greg Tusar, managing director, Goldman Sachs Electronic Trading, in a statement.
Will Sterling, managing director, UBS Electronic Trading, added: “Our clients are looking for incremental liquidity without having to split each order across many different algorithms. These agreements should offer clients access to additional high quality liquidity without making their trading process more complex.”
The banks say the links will not sacrificing confidentiality and anonymity. “We value our clients’ confidence in us to provide them with additional liquidity with no information leakage in the handling of their orders,” said Andrew Silverman, managing director, Morgan Stanley Electronic Trading. “These arrangements will enable us to work with trusted industry participants to deliver the same level of confidentiality our clients have come to expect from us.”
The news closely follows the announcement that Credit Suisse and BNY Convergex had set up a link between their respective US dark pools – CrossFinder and VortEx. As a result of this agreement, Credit Suisse now connects to 26 US dark pools.