Instinet Europe Limited and Virtu Financial Ireland Limited (Virtu) announced that they have entered into a bilateral liquidity streaming relationship. This relationship provides Instinets buy and sell side clients with aggregated liquidity and opportunities for price improvement.
Instinet clients now have access to additional liquidity at the touch, filling a gap between lit venues and large in scale blocks. This provides opportunities for price improvement and larger size fills, which minimizes clients footprint in the market. Instinets agency aggregation services already connect to conditional and over the counter (OTC) liquidity venues, as well as exchanges and Multilateral Trading Facilities (MTF).
The liquidity streaming relationship also provides clients with new options to interact with market maker liquidity. Clients remain anonymous but the arrangement provides the liquidity provider with Instinet as a known counterparty, to which the liquidity provider can offer price improvement and larger size.
As the marketplace anticipates MiFID II regulatory changes to liquidity provision, a shift toward bilateral trading relationships and the registration of additional Systematic Internalisers (SIs), market participants will be required to change the way they route orders, interact with, and access sources of liquidity. This relationship with Virtu reinforces Instinets commitment to offer more diverse sources of liquidity, and to simplify the potential post- MiFID II execution process for the firms buy and sell side clients.
The trading environment is poised to become even more complex, while at the same time, clients will be asked to attest to their best execution practices. Instinets highly configurable infrastructure can be tailored to each client, which enables us to serve as their agency-model hub or neutral curator of diverse sources of liquidity, said Richard Parsons, CEO of Instinet Europe Limited.
Christiaan Scholtes, Head of EMEA Markets at Virtu, said: As the liquidity landscape in Europe undergoes a fundamental paradigm shift, were looking for intelligent ways to adapt. We see this relationship as an opportunity to transparently and efficiently provide our risk liquidity to a broader set of participants through Instinets high quality, neutral agency platform.
