Bids ATS Boosts Liquidity

Terry Flanagan

Electronic trading platform DirectMarkets has made a connection to Bids, an alternative trading system. The connection will allow DirectMarkets to provide its customers with direct and anonymous access to the block liquidity at Bids.

“This exposes DirectMarkets clients to more liquidity,” said Kevin Lupowitz, chief executive officer of DirectMarkets. “This will give them better execution quality when they do at-the-market orders. Likewise this will also give clients at Bids access to that primary liquidity that’s being created by way of issuers at DirectMarkets.”

“It is great that we will have a partnership with Bids and we hope it’s mutually beneficial, resulting in more liquidity for Bids and more value and better execution quality to issuers in our client base,” added Lupowitz.

DirectMarkets is a subsidiary of broker-dealer Rodman & Renshaw Capital. It is the operator of an automated electronic transaction platform to directly link existing public company issuers and investors seeking to transact primary offerings of securities. Securities transaction services on the DirectMarkets platform will be provided through Rodman & Renshaw.

Bids Trading is a dark pool operator, owned by a consortium of financial institutions, including Bank of America Merrill Lynch, Barclays, Citi, Credit Suisse Group, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Knight Capital Group, Morgan Stanley, NYSE Euronext, and UBS. A block trade is usually an order to buy or sell 10,000 shares or more.

Bids’ ATS allows market participants to trade large blocks of equities without revealing their order.

Bids in February traded about 71.3 million shares per day. While that is down about 4% from the same time a year ago, it is performing well compared to the equity markets as a whole, which are down 10% to 15%.

This is the latest partnership or connection formed between trading venues, whether exchange or alternative platform, in recent months.

Singapore Exchange and Eurex last month announced that they will provide access to each other’s co-location data centers, facilitating easier market access for clients of both.

Transaction Network Services recently announced that it has expanded its global exchange network by adding CME Group’s market data feeds. It will allow TNS’ members access to data from CME’s four designated contract markets as well as access the Dow Jones Indexes.

CME Group prior to that also came to an agreement with Eris Exchange, a designated contract market, whereby the Chicago exchange giant will distribute Eris market data. Through more than 300 direct connections, the CME Market Data platform serves approximately 630 licensed market data distributors.

Just prior to that, NYSE Euronext and the Tokyo Stock Exchange agreed to offer interconnectivity between each other’s trading platforms. The partnership started off with the distribution of market data.

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