Daiwa Capital Markets
DRECT is a highly customisable low-latency liquidity management platform integrating market data aggregation, automated crossing, and smart order routing. Apart from optimised routing strategies, Daiwa offers customised solutions to institutional clients.
Access and algorithmic integration
Clients can access DRECT
through execution channels
including DMA, algorithms
and care and program
trading desks.
Destinations
DRECT is currently available
in Japan and will soon
connect to other major Asian
markets.
DRECT is connected to
Tokyo Stock Exchange, Osaka
Stock Exchange, SBI
Japannext and Chi-X Japan.
As part of the firm”s
expansion into Asia, India”s
National Stock Exchange and
Bombay Stock Exchange,
Chi-East and other Asian
markets will be added in the
near future.
Order types and client reporting
DRECT can support any
order type. Transaction cost
analysis reports on SOR
performance are provided to
clients.
Data feeds
DRECT uses Activ Financial
for its low-latency market
data feed.
Routing logic
DRECT has sub-millisecond
latency and a scalable
architecture that allows
capacity to be increased
easily. It can currently handle
20 million orders per day in
Japan.
DRECT”s routing
decisions are based on the
quality of the venue such as
price, liquidity, cost, and
latency. The router uses heat
maps and real-time data is
constantly evaluated against
historical data to dynamically
evaluate routing decisions.
Daiwa also employs a venueranking
metric based on fill
rates, impact cost, and quote
stability. Parameters are
exposed to the client so that they may adjust the
behaviour of the routing
strategy.
Anti-gaming and anti-signalling
measures are
employed on dark and lit
venues, respectively, in order
to minimise information
leakage.
DRECT has been tested
for fault-tolerance under all
conceivable outage scenarios
with no data loss and full
recovery within a few
seconds.
Future plans
Daiwa is working on adding
venues to its SOR as well as
improving its routing
strategies.