Liquidity & Electronic Trading special report
Click here to download the PDF
Olympic-sized pools
In this Waters special report examining liquidity in the markets, our roundtable feature asked a number of capital markets firms and service providers how they think regulatory changes intended to reshape market structure will in turn affect flows of liquidity. Their answers appear to point the way to one big pool in our future.
Executives from Fidelity and Goldman Sachs, when asked how the Securities and Exchange Commission (SEC)-proposed market structure changes and the European Commission's Markets in Financial Instruments Directive II (MiFID II) will change the flow of liquidity, indicated they believe fragmentation or tiering of markets is not on the horizon.
While more trades have gone to dark markets in the past two years and with the SEC's trade-at regulation on the way, paradoxically these capital markets executives see fragmentation of markets declining. As Mike Cashel of Fidelity Capital Markets says, "While fragmentation [now] may be at a peak, the markets today are more connected and consolidated from an access to liquidity point of view than they ever have been."
Still, even without fragmentation causing disadvantages for some market participants, we wondered if there might also be a divide between large firms that can build their own smart order-routers and smaller firms that use external order-routing providers. Smaller firms can buy into and leverage the tools of larger ones, Adam Mazur, global head of connectivity at Goldman Sachs Electronic Trading, tells us.
With interconnection of once-fragmented markets now well developed, and the interest of large firms in providing their advantages -for an affordable fee-to smaller firms, liquidity flows as freely as it ever has. That is also evident when, as Mazur observes, most remaining untapped liquidity is from existing sources rather than new discoveries. If liquidity is no longer fragmented or divided into a two-tier market, one can only conclude the markets have indeed become one giant free-flowing liquidity pool, regardless of how many pipes it takes to make it so.
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 Trading Tech
This Week: BBH, AllianceBernstein add data solutions, Deutsche Börse-Nodal Exchange, and more
A summary of some of the latest financial technology news.
Consortium backs BGC’s effort to challenge CME
Banks and market makers—including BofA, Citi, Goldman, Jump and Tower—will have a 26% stake in FMX.
Symphony boosts Cloud9 voice offerings with AI
The messaging and collaboration platform builds on Cloud9’s capabilities as it embraces the AI wave in what CEO Brad Levy calls “incremental” steps.
Can exchanges leverage new tech to claw back ETF share from RFQ platforms?
Systematic trading strategies and proliferating data are bringing efficiency to an otherwise-fragmented European ETF market.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
This Week: HKEx's new derivatives platform; GoldenSource; Quonian-SimCorp, and more
A summary of some of the latest financial technology news.
Chris Edmonds takes the reins at ICE Fixed Income and Data Services
Edmonds is now leading ICE’s fixed income and data business as the rush to provide better data and analytics in fixed income builds.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Nasdaq reshuffles tech divisions post-Adenza