ITG to offer conditional order function in POSIT Europe

Conditional order type will enable buy-side to take advantage of block trading under the large-in-scale waiver.

ITG has confirmed it will offer conditional order types on its POSIT Alert dark pool in Europe.

The move is in response to MiFID II’s caps on dark pool trading, which will drive more firms to trade using the large-in-scale waiver which is exempt from the caps.

POSIT Alert clients can choose to enable conditional order functionality and will be able to interact with sell-side conditional orders, enabling them to execute in POSIT MTF against block liquidity.

ITG said conditional orders will significantly enhance buy-side block liquidity available through POSIT Alert.

The functionality has already been available as an opt-in feature on POSIT Alert in the US and will now be rolled out in EMEA in the second quarter of 2017.

Trading venues and brokers have been experimenting with conditional order types in recent years as a result of MiFID II’s limitations on dark trading. A conditional order can enable firms to continue trading as usual but when an opportunity to trade a large block arises it can withdraw other orders. This enables traders to take advantage of the large-in-scale waiver, which has been exempted from caps on dark pool trading.

Duncan Higgins, head of electronic products for ITG in Europe, said: “With the MiFID II trading rules nearing on the horizon, there is a greater focus on block trading. Investors are looking to interact with non-displayed liquidity in a more deliberate way and the conditional orders functionality enables users to access new block liquidity sources while still minimizing their market impact.”