Investment bank UBS Securities Australia has announced that its internal crossing engine, Price Improvement Network (PIN), now allows clients to cross orders at the mid-point price on the Australian Securities Exchange (ASX).
According to UBS, the availability of mid-point pricing in PIN will offer price improvement while also reducing the risk of market impact. PIN’s mid-point cross for Australian stocks will be subject to the bid/offer spread at the time of reporting to the ASX.
UBS already offers mid-point crossing for PIN in Hong Kong, London and the US.
Available in Australia since June 2009, PIN allows clients to match their orders with UBS agency flow before they are routed to the ASX’s displayed order book. UBS hopes to add more functionality after the ASX completes the roll out of new order types in June.
“All of our algorithms can post liquidity on the ASX at the bid or offer, and now when interacting with UBS PIN at the mid-point,” said Gary Head, managing director, head of UBS client trading execution, Australasia. “This will help clients to reduce market impact and will enable our VWAP algorithm, for example, to even more closely track its benchmarks. All of our algorithms, including UBS Tap, our liquidity-seeking algorithm, can now offer this opportunity for significant spread savings.”
“Since the beginning of March when we went live with mid-tick crossing for key clients, around 70% of the executions in UBS PIN were in excess of A$10,000, and over 35% were as large as A$100,000,” added Steve Hammerton, head of Australia Direct Execution and portfolio trading, UBS. “This shows the power of this crossing network for larger orders, which is very exciting to our buy-side clients.”