ATS-in-a-box is deployed on virtualized platform.

Broker-dealers are deploying special-purpose platforms to internalize, or cross, order flow, and providers of such platforms are delivering the service via the cloud.

Fundamental Interactions’ FIN Virtual Exchange, a trade aggregation, order crossing, routing and execution engine for ATS operators and broker/dealers, is deployed as a Service via the Options PIPE financial cloud.

“FIN Virtual Exchange is essentially an ATS in a box,” Julian Jacobson, president of Fundamental Interactions, told Markets Media. “It maintains an order book, disseminates prices, matches orders and/or smart routes them to other destinations. It is RegNMS compliant and supports a range of order types.”

Brokers deploy Virtual Exchange as a dark pool or a crossing gateway, which allows them to consolidate order flow and build a virtual book of client orders for crossing opportunities.

Orders routed to external venues can be pulled back and matched against orders passing through the gateway.  When brokers match orders they eliminate exchange and clearing fees, they take in additional tape revenue and they facilitate price improvement for clients, said Jacobson

Fundamental Interactions designs global, multi-asset class trading systems.

“Our focus is to improve the performance, efficiency and value available within an electronic trading appliance,” said Jacobson. “Our products are used by brokers, exchanges, market makers and proprietary trading firms.”

The deployment of FIN Virtual Exchange order matching and execution engine on the Options PIPE platform will create a more efficient and cost-effective platform for broker/dealers who want to internalize their order flow.

“Trading firms are increasingly looking to move their trading systems into a private cloud environment, which is offered as a pay-as-you-use service provides a more cost efficient way for firms to get to market with new strategies,” Nigel Kneafsey, CEO of Options IT, told Markets Media.

There are currently one broker dealer firm and one ATS operator live on FIN Virtual Exchange, each with a clientele comprised of multiple institutional firms using it for a combination of matching and advanced order routing, said Jacobson.

Total flow passing through FIN Virtual Exchange is approximately 60 million shares per day, and is projected to hit 100 million shares per day in the first quarter of 2012 as these and other firms ramp up, Jacobson said.  Total matched volume is currently less than 2 million shares per day.