Optiver has moved to convert into a systematic internaliser (SI) as a “natural next step” in the businesses’ growth and progression plan, The TRADE can reveal.
The roll out is imminent and will take place gradually over the next few months, Optiver confirmed.
The move comes as part of the natural progression of the business, Optiver’s head of European equity market structure, Anish Puaar, told The TRADE.
“Our direct counterparty business is growing and the SI is a more familiar framework for that liquidity provision,” he said.
“The way that we trade with our buy-side counterparties now won’t change at all. Our core offering of showing two way prices through to buy-side EMSs doesn’t change in any way. We’re just now doing it in an SI capacity.”
“It is just a more familiar workflow for the buy-side institutions that we trade with.”
Puaar further added that the decision will allow Optiver to expand the number of stocks it can offer up liquidity for, ultimately expanding the strategies it can offer to buy-side firms.
“That [offering more stocks] helps us to expand the strategies we can offer in terms of trading baskets for example. There’s a wider universe and we can cater to different types of baskets for example. It makes a lot of things around the edges a bit cleaner.”
“There’s more flexibility there versus off book on exchange. When you’re reporting to an exchange you’re bound by that exchange universe. You can do more with an SI in terms of universe stock universe.”
The move will change the way that Optiver reports its trades. Prior to the decision, the market maker has printed its volumes in the off book on exchange segment. Going forward as an SI, Optiver’s trades will be reported as part of the SI bucket.
There are several changes to the SI regime pending in Europe following the Mifid II review. Puaar confirmed Optiver is currently focused on ensuring its new offering meets the new requirements.
“There’s a lot coming up in terms of changes to SI rules so we went through a lot of work to ensure we’re fully compliant and ready for what’s coming in terms of changes to SI thresholds, for example,” he said.