Instinet adds RFQ function to BlockMatch MTF

Traders will be able to trade RFQ on the Instinet BlockMatch trading venue alongside existing continuous, non-displayed and mid-point matching.

Agency broker Instinet Europe has added request for quote (RFQ) functionality to its equities multilateral trading facility (MTF) BlockMatch.

With RFQ, traders will be able to execute over-the-counter (OTC) transactions within the regulated venue, manage exposure of their intentions and match at a price other than the midpoint of displayed quotes.

Commonly used in fixed income, ETF and foreign exchange markets, RFQ allows traders to ask for quotes from counterparties based on security and quantity.

The quote can be advertised to potential counterparties within trading facilities like BlockMatch either on a one-to-one or all-to-all basis. Instinet said this method is an efficient means of price discovery for large orders where no quote is available.

Head of EMEA business development at Instinet, Ben Stephens, explained that one of the key regulatory objectives is to bring more trading onto centrally cleared venues, and the addition of RFQ to the central clearing party (CCP) platform encourages this migration.

“By adding ‘all-to-all’ RFQ functionality on BlockMatch’s CCP cleared platform, trading interactions that used to be primarily done over-the-counter can now be executed in our regulated venue,” he said.

“We believe this fits well within the spirit of MiFIR share trading obligations, while at the same time giving our clients and members opportunities to benefit from automating the management of their liquidity.”

As part of its preparations for MiFID II, Instinet added it has opened its BlockMatch MTF to central counterparty clearing and new members, with the possibility of buy-side client access through non-trading memberships.

BlockMatch also offers continuous, non-displayed and mid-point matching alongside RFQ methods of trading.