Liquidnet operates two multilateral trading facilities (MTFs), the Liquidnet Negotiation MTF and the Liquidnet H2O MTF. The Liquidnet Negotiation MTF enables members to use the desktop application to negotiate trades on a one-to-one basis directly with other Liquidnet members. The Liquidnet H2O MTF, known as Supernatural, provides members with the ability to interact with additional order flow provided by authorised and admitted sell-side firms or other MTFs, known as Streaming Liquidity Participants (SLPs).
Functionality and order Types
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. The model facilitates the trading of large blocks of equities, thereby giving price improvement with minimal market impact. As all trades are handled anonymously, members never know the identity of the other members with whom they have traded.
Access and participation
Membership to the Liquidnet community is free for buy-side institutions who meet certain criteria, including size of assets under management.
Liquidnet”s dark pools offer trading in equities, American depository receipts and global depository receipts.
Liquidnet has a dedicated Liquidity Watch team that provides unbiased, real-time monitoring of trading activity, conducts historical data analysis and generates comprehensive reports. This liquidity protection programme monitors member and SLP behaviour and trading patterns and investigates complaints.
Liquidnet does not have liquidity sharing arrangements with other dark pools.