Liquidnet
Liquidnet brings the institutional marketplace directly to asset managers, allowing buyers and sellers to trade directly and anonymously with each other, while also accessing actionable liquidity delivered from third-party sources for buy-side members to interact with if they wish. The model was created to make institutional investors achieve best execution. |
Liquidnet’s platform has over 750 asset managers trading in its pool on a daily basis delivering an average global daily liquidity of $83 billion. H1 negotiated match rates were 21.8% with a realisation rate 23.6%. Average execution size is $1.2 million globally.
Functionality and order types
The model is designed to facilitate the trading of
large blocks of equities, thereby giving price improvement with minimal market
impact. Day orders and immediate or cancel orders are supported but the vast
majority of liquidity is passively sourced from members’ order management
systems (OMS).
Access and participation
Membership to the Liquidnet community is only
available for buy-side institutions that meet certain criteria, including size
of assets under management. The pool is accessed either through its negotiation
model through a member’s OMS/EMS, or via the execution desk.
Instruments traded
Liquidnet’s dark institutional venue offers trading
in equities, American depository receipts, global depository receipts and
exchange-traded funds in markets globally.
Order protection
Members’ orders stay anonymous and protected and
Liquidnet’s Liquidity Watch team and real-time continuous monitoring technology
actively protect liquidity and the member community.
Connectivity/sharing agreements
Liquidnet has liquidity sharing arrangements with
25 other dark venues. The majority are driven outbound by its algorithmic
offering and inbound by how it sources liquidity for institutional members.
Future developments
The platform recently introduced a commission management product to help members maximise their commission spend, and create greater transparency around commission management.