The Tradetech Daily

Daiwa Securities

Daiwa Securities


Markets covered

 DRECT is Daiwa Securities’ liquidity
management system offering price-size-time 
priority crossing within the primary
exchange bid-ask spread for Daiwa’s institutional, corporate, retail, and
franchise clients.

Order protection

The state of the dark order book is not
accessible by front-office personnel and access to DRECT is only granted to pre-certified
IT staff by means of a one-time token issued by IT management. DRECT does not
issue IOIs , does not disclose activity of any sort, and does not have any reciprocal
access agreements with other broker dark pools.

DRECT is highly unattractive to gaming as
the information cost is much higher in comparison to the majority of broker
dark pools thanks to the price-size-time priority. DRECT also supports minimum
and maximum quantity parameters, counterparty opt-outs, and various custom
settings (e.g. mid-or-better) to fine-tune exposure to the dark pool. Daiwa’s
algos are equipped with an evolving array of price and volume metrics to minimise
adverse selection.


DRECT is accessible by all of Daiwa’s
clients through all execution channels offered at Daiwa (DMA, algo, and care), subject
to client consent and management approval.

Order types and matching logic

DRECT uses a price-size-time priority to
match trades. The trade price, quantity, and counterparties are determined by
evaluating client-imposed crossing constraints and finding an optimal solution
on a trade-by-trade basis that maximizes the quantity crossed. All order types
are subject to crossing in DRECT


There are no current plans for future
tie-ups. DRECT’s cross ratio is 13% on average and frequently as high as 25%.