Double-Edged Sword: Rules of Engagement, Risk Mitigation to Differentiate Liquidity Sources

Liquidity in equities and FX appears robust—but is it just a mirage?

A highly fragmented market for liquidity has taken hold in US equities and foreign exchange (FX) trading following the breakup of the major exchange operators' liquidity duopoly after passage of National Market System (Reg NMS) rules in 2005. New venues offering liquidity, whether ECNs or internal dark pools, may well now be reaching critical mass, and more choice would always seem better for competition. Yet panelists at this year's Buy-Side Technology North America summit say that liquidity