Following record growth and strong volumes, Japanese off-exchange liquidity venue TORA Crosspoint could be launched in new markets across Asia and extended to other asset classes.
Agency broker and technology vendor TORA witnessed volumes in TORA Crosspoint grow by 91.7% year-on-year for Q1. Without revealing definitive volumes, the company said it had Q2 it had already experienced a promising start, with executed volume traded in April increasing 112.3% over last year.
“The significant uptick in volumes traded through TORA Crosspoint this year reflects increased liquidity in the pool which consistently delivers cost savings of, on average, eleven basis points to buy-side traders,” said Robert Dykes, chief executive officer of TORA. “We will continue to build on TORA Crosspoint in Japan and can see the potential of expending it into other markets in Asia and other assets classes beyond equities.”
In the first four months of 2012, TORA Crosspoint offered, on average, more than 1,200 individual equities. As well as connecting to ten dark and lit venues in Japan, TORA Crosspoint leverages natural internal liquidity traded through TORA Compass, the company’s execution and order management system.
“Exchange and venue growth in Japan has been very positive over the last few years, ever since regulatory changes helped develop market structure for dark pools, translating into a lot of growth,” said Dykes.
As a result, Dykes said there was an increasing buy-side trend to seek liquidity and price improvement opportunities in off-exchange liquidity venues for the Japan market.
“Our business has outperformed over the last couple of years and we expect a growth rate well in excess of 100% to also happen this year,” said Dykes. “Our approach is very different from others. The core of our business is execution technology for the buy-side.”
He insisted Japan was among the most liberal trading markets in Asia, with various lit and dark pools catering to the institutional community.
“Asia comprises a lot of different markets and the growth we are witnessing in Japan is not happening in many other markets because of regulatory reasons and other factors,” said Dykes. “What the buy-side often see in TORA is a firm in touch with the markets in Asia and the change which is going on around us. We’re able to deliver as this market structure changes by working collaboratively with the exchanges, banks and buy-side to deliver new functionality into trading systems.”