Agency broker ITG has released a new trading tool for retail broker-dealers to access liquidity.
The firm’s new Smart Retail Router is connected to multiple exchanges, electronic communications networks and alternative trading systems, including ITG’s own POSIT dark pool.
The router is also connected to a network of traditional and non-traditional wholesale market makers, which ITG says lets brokers maximise execution quality.
Users can customise the router’s order-handling logic and can access it via a FIX connection and via most execution and order management systems.
“ITG Smart Retail Router is our latest innovation to help clients realise best execution,” said Dan Weingarten, head of liquidity management sales. “By combining ITG’s existing pool of institutional liquidity with focused smart routing and a network of wholesale partners, we’ve created an attractive alternative for the retail brokerage community, in the process offering buy-side clients access to additional sources of high quality liquidity.”
When trading retail orders in the US, brokers typically send each trade to an aggregating broker who then offers an execution price that is equal to or better than the national best bid or offer.
The retail aggregator either internalises the order – either against its own order flow or other retail client orders – or routes it to the public markets, where it is protected under Reg NMS, which obligates trading venues to redirect orders to another venue if it displays a better price.
ITG’s Smart Retail Router is part of the firm’s Liquidity Management platform, which comprises algorithmic trading tools for 35 markets, its POSIT dark pool and its POSIT Alert block crossing tool.