Fidelity Brokerage Company, and Lehman Brothers have linked their alternative trading systems (ATS): Fidelity’s CrossStream and Lehman Brothers’ Liquidity Center Cross (LCX).
The connection between the systems aims to broaden execution capabilities for both firms’ clients by providing access to the combined liquidity of Fidelity Brokerage Company and Lehman Brothers.
At the end of 2006, Fidelity’s brokerage platform had $1.7 trillion in assets under administration, 17.1 million client accounts and $3 billion of equity trading per day.
Lehman Brothers’ platform, as of February 2007, had achieved a top overall ranking in the NYSE Program Trading league table for 29 of the last 30 weeks.
“Today’s current trading environment has made it increasingly difficult for investors to execute large trades with minimal market impact and information leakage,” says Bill Baxter, senior vice president and head of equity for Fidelity Capital Markets Services. “By connecting CrossStream’s already deep and diverse liquidity pool with Lehman Brothers’ Liquidity Center Cross, clients of Fidelity Brokerage Company can have the confidence that the organization may quickly and discreetly find a natural match for their orders.”
“Partnering with Fidelity Brokerage Company underscores Lehman Brothers’ commitment to seek innovative solutions to provide liquidity to our clients, “adds Michael Bleich, head of liquidity strategy at Lehman Brothers. “Lehman Brothers’ Equities franchise has significantly invested in its electronic trading platform in order to offer our clients best-in-class capabilities in an increasingly complex marketplace.”
Run on technology developed by Fidelity, CrossStream is designed to offer the firm’s institutional clients the ability to find an anonymous match and increase the percentage of their trades executed on the ATS. Fidelity provides access to both large, liquid securities that can be moved in bulk and a wide range of smaller, less-liquid issues that can be difficult to trade in the public markets. In addition, the platform’s order-matching logic is conducted within the National Best Bid and Offer (NBBO) spread to help ensure quality executions with minimal market impact. CrossStream offers a range of advanced order types, including market, limit, pegging, discretion, and minimum execution quantity.
Liquidity Center Cross (LCX) is a low latency, high capacity limit order matching engine that operates on a continuous basis during market hours. Executions occur at or within the NBBO. The system can generate price improvement versus the displayed markets and reduce market impact. LCXTM also enables traders to anonymously source liquidity from a wide range of order flow that checks LCXTM for price improvement before heading to the public markets.