The Tradetech Daily

Daiwa Capital Markets

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.


DRECT is currently available

in Japan and will soon

connect to other major Asian


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


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


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


Anti-gaming and anti-signalling

measures are

employed on dark and lit

venues, respectively, in order

to minimise information


DRECT has been tested

for fault-tolerance under all

conceivable outage scenarios

with no data loss and full

recovery within a few


Future plans

Daiwa is working on adding

venues to its SOR as well as

improving its routing