Liquidnet, a buy-side-only block crossing network, has announced the launch schedule for its Supernatural service in Europe and has signed up 12 liquidity providers.
Supernatural, already available in the US, allows Liquidnet’s buy-side members to access liquidity from external sources such as brokers, exchanges and multilateral trading facilities (MTFs), which Liquidnet calls Streaming Liquidity Participants (SLPs). The 12 European SLPs include MTFs Chi-X Europe, NYSE Arca Europe, BATS Europe and Nasdaq OMX Europe, exchange NYSE Euronext and brokers Instinet, Credit Suisse, Deutsche Bank, Sanford Bernstein, CA Cheuvreux. The SLP list also includes two further brokers, which Liquidnet did not name.
The US version of Supernatural, launched in 2005, now has 25 SLPs.
Supernatural was approved by the Financial Services Authority, the UK’s financial regulator in August. Pilot testing with a select group of members will begin in October, with a full launch to all members once this is complete.
Under the agreement with Chi-X Europe, Chi-Vision, the MTF’s liquidity aggregation service, will enable its clients to execute against Supernatural liquidity, while Liquidnet Europe will become a direct trading participant of Chi-X Europe. This will allow Liquidnet members, through Supernatural, to execute against Chi-X’s visible and non-displayed liquidity.
According to Liquidnet, the addition of the SLPs’ liquidity to the existing buy-side flow will give clients more choice when executing block orders. The company stressed that SLPs are not members, do not have direct access to the Liquidnet system, and can only make their flow available to members,
Members control what liquidity to access and how aggressively to trade using their desktop applications or the Liquidnet European Trading Desk, an agency-only trading desk. Liquidnet members could, for example, start filling a block order using Supernatural while waiting for a match in the main buy-side-only pool.
“Supernatural is already a hit in the US, and we expect to mirror that success in Europe in the future,” said John Barker, managing director of Liquidnet in Europe, in a statement. “Supernatural will offer a menu of strategies to intelligently seek out and deliver liquidity directly to Liquidnet’s buy-side members, taking away the need to fragment their order amongst multiple external venues. This will allow Liquidnet members to fill more of their orders, more of the time, all auto-executed at the mid-point. We’re giving buy-side traders the liquidity they need, when they need it, without compromising their anonymity or markedly moving the market.”
Liquidnet launched in the US in 2001 and Europe in 2002. The platform now operates in 30 equities markets across five continents.