With the reciprocal agreement, the firms will provide their clients with access to each other’s ‘dark’ liquidity pools Credit Suisse’s CrossFinder and Instinet’s CBXSM thereby increasing institutions’ chances of executing larger trades with minimal market impact.
The recent evolution of the equity markets has produced exponential growth in ‘dark’ liquidity pools, and this new dynamic has fragmented markets and created a logistical nightmare for our institutional clients, said Michael Plunkett, president for North America at Instinet. We are addressing this issue by opening up our CBX to Credit Suisse’s institutional order flow and, simultaneously, offering Instinet’s institutional clients access to CrossFinderTM. Our goal is to solve the buy side’s new frustration by creating partnerships that enhance access to liquidity while continuing to provide anonymity.
Being able to access the combined liquidity will enhance performance and increase fill rates throughout the entire suite of AES algorithms, said Dan Mathisson, MD and head of advanced execution services at Credit Suisse.
Under the terms of the deal, Credit Suisse’s CrossFinder will now become an additional liquidity pool that Instinet’s Nighthawk algorithm sweeps, while Instinet’s CBX will be added as a liquidity source to Credit Suisse’s Guerrilla algorithm.
The agreement also calls for each firm’s suite of algorithms to be available through the other’s trading front ends Instinet Trading Portal and Newport from Instinet and through more than 40 trading systems that partner with Credit Suisse.
