Instinet and Virtu enter into liquidity streaming agreement

Changes to the provision of liquidity in Europe under MiFID II will see shift towards bilateral trading relationships.

Instinet and Virtu Financial have established a bilateral liquidity streaming relationship to provide Instinet’s buy- and sell-side clients with liquidity and price improvement.

Clients will see additional liquidity to fill the gap between lit venues and large-in-scale blocks, for better pricing and larger-size fills to minimise the footprint in the market.

There will also be options to interact with market maker liquidity whilst remaining anonymous, and the arrangement will see Instinet become a counterparty for liquidity providers. 

Instinet explained changes to liquidity provision under MiFID II will see the industry shift towards bilateral trading relationships and the registrations of systematic internalisers.

Market participants will be forced to change the way they route orders, interact with and access sources of liquidity.

Richard Parsons, CEO of Instinet Europe, commented the trading environment is set to become even more complex.

“Instinet’s highly configurable infrastructure can be tailored to each client, which enables us to serve as their agency-model hub or neutral curator of diverse sources of liquidity,” he said.

Christiaan Scholtes, head of EMEA markets at Virtu, added changes to the liquidity landscape in Europe led to the firm looking for ways to adapt.

“We see this relationship as an opportunity to transparently and efficiently provide our risk liquidity to a broader set of participants through Instinet’s high quality, neutral agency platform.”