Turquoise, the pan-European Multilateral Trading Facility (MTF), has launched a new service aimed at bringing together large block orders in a “truly neutral, passive environment,” undisturbed by “aggressive, low-latency trading strategies,” according to a company statement.
The new service, Turquoise Block Discovery (TBD), sits on top of Turquoise’s existing Midpoint Dark Book (MDB).
TBD was developed in partnership with both buy- and sell side participants, and will be supported by seven major brokerages, including those of: Instinet, JPMorgan, Barclays, Morgan Stanley, Neonet and Societe Generale. Bank of America Merrill Lynch, Citi, Deutsche Bank, UBS and others are expected to join shortly, according to the statement.
Officials say that TBD is intended to significantly improve users’ ability, within the MDB, to trade larger block orders by matching block indications. Once potential matches have been identified the service requires participants to send firm qualifying block orders to Turquoise Uncross.
Uncross is a series of randomized uncross events, which takes place between five and 45 seconds, with the frequency depending on the liquidity of the security, officials say. Reputational scoring and surveillance will monitor the conversion of Block Indications into firm orders.
“The demands of our clients for us to seek out liquidity, combined with an evolving European regulatory landscape, which is moving toward the use of larger block trades, make continued development in this area essential,” says Adam Toms, CEO, Instinet Europe in a statement. “Instinet sees this new Turquoise Block Discovery service as an innovative and timely addition to the market. It provides us with the ability to place a conditional order to a venue offering increased chances of finding a larger block of dark liquidity, while simultaneously being able to continue to search other liquidity pools.”
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