Company combines elements of social media technology with compliance and audit trail functionality.
Squawker has announced the launch of its block trading negotiation venue for institutional clients, which fuses anonymized orders with social media technology.
Regulated by the UK Financial Services Authority (FSA) and based in London, Squawker secured series A private investment eight weeks ago. The platform itself, which has a tenative go-live date for the first quarter of 2013, operates with a primary emphasis on human interaction. Trades are negotiated anonymously through the platform, while the ability to evaluate a counterparty adds in a new dimension to operations. Traders will be able to set parameters regarding elements such as failed trade numbers, for instance, to source preferred archetypes of counterparties.
Squawker will include in-built audit trail and compliance functionality along with its anonymized social aspects. The reduction of algorithmic order flow in this fashion, along with mitigating the potential effects of 'pinging'─where small buy and sell orders are sent into a market in order to determine the size of a block trade─will reduce toxicity in the market, say Squawker's executives.
"Order book trading has reduced costs and improved efficiencies for smaller orders," says Chris Gregory, director at Squawker. "Larger-sized trades remain difficult to trade both on and off exchange. Sell-side traders currently have two choices; risk the market and opportunity costs of slicing and dicing block trades and executing them through either lit or dark order books, or trade via an interdealer broker, without the benefits of electronic transaction processing, compliance monitoring or audit trail. The time has come for a new type of trading venue, one that eliminates algorithmic flow and combines personal interaction and behavior with the efficiencies of electronic processing. In so doing, the financial markets will finally have an electronic venue free of toxicity."
On launch, Squawker will support all stock exchange-traded instruments in 16 European nations.
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