UPDATE: Liquidnet Acquires OTAS Technologies
The trading network adds OTAS' analytics system to its buy-side trading platform.

The acquisition will result in the combination of Liquidnet’s Virtual High Touch decision-support trading platform with OTAS’ analytics platform.
The Virtual High Touch platform was introduced in November 2016 to support traders with their best execution obligations, providing decision-support tools for institutional traders, such as advanced data analytics, liquidity search tools, advanced algorithms, and real-time decision support.
Rob Laible, global head of equity strategy at Liquidnet, tells WatersTechnology that regulations—and specifically Mifid II—were a key reason for acquiring OTAS.
“Given the regulatory environment, what used to be art now is becoming more of a science,” he says. “The more quantitative support tools you can use, the more rigorous your process; so this acquisition makes a lot of sense.”
Laible says that while the two vendors come from different backgrounds, they are similar in many ways.
“We tend to be more at the point of the trading decision, where we try to give people insight into which path to take, such as which algo to use, or doing a block and then following up with a specific algo, etc.,” he explains. “OTAS is quite different, in that they alert users to something that’s going on that they need to pay attention to and should interact with. … Together, we can provide a complete end-to-end, insightful innovative solution that traders can use in their pursuit of best execution.”
Together Alone
Liquidnet says both companies’ products will integrate, while they will also continue to operate separately for each client base, if desired.
“What we have is a front-end that is used by approximately 850 of the largest institutional managers in the world,” he says. “We will gain a lot of value through OTAS’ quantitative analytics and we plan to integrate them into our front-end for our strategic members.”
He says that OTAS will continue to support their channel partners, order management systems (OMSs) and execution management systems (EMSs) and their current subscribers. OTAS has more than 60 financial institutions connected to the platform, either directly or via other partners, such as OEMS providers.
“The value will be in our front-end, where will be able to deliver our intellectual content in an unencumbered way,” he explains. “Through leveraging our existing distribution, we will be able to move quickly and continue to innovate.”
The Mifid II Effect
As Mifid II’s January 3, 2018, implementation date draws closer, the industry is experiencing shifts on various levels, including what is expected of third-party vendors.
Spencer Mindlin, capital markets analyst at Aite Group, says that while asset management firms have been using technologies like OTAS for a long time, they have been slow to think how they are going to comply with Mifid II.
“OTAS is the answer to a lot of questions about what to do for Mifid II,” he says. “Bringing them together is going to be good, as they provide a useful suite of tools for asset managers.”
While Liquidnet is helping with the trading process, OTAS is focusing on the real-time analysis and decision making. “Independently, they were good,” Mindlin says. “But together they’re much more useful; it is important to have one company responsible for both, ensuring that OTAS’ software is in line with the rest of what Liquidnet is doing.”
Consolidation Trends
The acquisition is part of a pattern Mindlin has identified lately in the industry. While some mergers are merely a way for firms to reduce costs and survive, Liquidnet–OTAS falls into another category.
“You see firms acquire smaller ones that are nimble, disruptive or innovative with what they’re doing,” Mindlin explains. “For example, Liquidnet recognized that OTAS has built a very niche and good product and was looking for ways to get bigger.”
Picking up OTAS, he says, defends its position to the rest of the industry and gives a competitive advantage.
“It is important to appreciate what’s going in technology itself that has enabled OTAS to get where it is,” Mindlin says “New firms are able to spin up utilizing technologies like new APIs and HTML5 and become relevant very quickly.”
He says larger firms are looking to buy these specialized niche products because it is much easier to let someone else develop a product like that and then pick it up rather than trying to innovate internally.
“The barriers to innovate and build new technology have come way down,” Mindlin explains. “That’s why you’re going to see more consolidation happen, where large firms are picking up small new ones to bring them into the fold.”
Further reading
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
This Week: Tradeweb, LTX/AWS, Bloomberg and more
A summary of the latest financial technology news.
BloombergGPT: Terminal giant enters the LLM race
Bloomberg has developed a large language model with the aim of improving its Terminal’s ability to provide sentiment, charting and search.
SEC cyber rules risk creating web of confusion and costs
The regulator’s proposals would require breach notifications, public disclosures and annual cyber assessments.
Waters Wavelength Podcast: Episode 262 (Previewing Nafis)
Wei-Shen and Tony take a look at what’s to come at the North American Financial Information Summit (Nafis).
Waters Wrap: On SVB, Credit Suisse and questions left in the wake
After the latest 'crisis' that claimed Silicon Valley Bank, Credit Suisse and others, Anthony questions whether anyone will learn a lesson.
This Week: Esma, Crossover Markets, SteelEye and more
A summary of the latest financial technology news.
New chatbots reveal limitations of legacy API development
As large language models that underpin the likes of ChatGPT and Bard come to market, vendors and trading firms are starting to see the benefits—and challenges—that open APIs provide.
Broadridge rethinks the OMS
Through its partnership with Glue42, Broadridge is bringing together the best components of its agency trading and market-making solutions.