BLOX Markets, emerging gradually from stealth mode, is in the process of developing a new retail focused equities ATS, Traders Magazine can reveal.
“At BLOX Markets, our mission is to open up access to off-exchange equity retail flow through order competition. We believe retail investors would benefit from greater competition in the execution of their orders and other investors would benefit from opportunities to execute against such orders, so we’re building a trading venue bridging the gap between retail and institutional investors”, Khody Azmoon, Head of Business Development & Product Strategy at BLOX Markets, said.
BLOX Markets foresees a big opportunity here. Azmoon previously expressed that the Tick Size & Access Fee proposal will likely be “the next retail equity market structure rule to be adopted”.
This anticipation is based on the comments provided by the SEC during the recent Bloomberg Equities Market Structure conference, and BLOX Markets anticipates adoption as early as Q2 based on feedback from the street.
He further indicated: “While we anticipate the Tick Size & Access Fee proposal will be adopted soon, these impending adjustments could create pressure on the Payment for Order Flow (PFOF) dynamics between wholesale market makers and retail brokers, fostering more competition for retail order flow.”
He mentioned that the last instance they witnessed such substantial equity market structure changes by the SEC was about two decades ago.
They perceive an uncommon chance emerging wherein companies that not only exhibit forward-thinking but also proactively construct their business models in anticipation of these market shifts can emerge as the next generation of leading firms in the marketplace.
“With that being said, we don’t see wholesale market makers as direct competitors,” Azmoon said.
“We operate in a very highly competitive industry where collaboration and competition often go hand in hand. It’s not uncommon for businesses to engage with various players in the market, including potential customers who are competitors too,” he said.
“Navigating these dynamics requires a strategic approach to ensure that our business interests align with all of our partnerships. In fact, we’re in discussion with several wholesale market makers to become potential investors,” he added.
According to Azmoon, there are several advantages: “We are building a trading venue facilitating access to off-exchange equity retail flow through open order competition between retail brokers and other market participants with the goal of resulting in better execution quality and increased natural liquidity crosses with lower market impact.”
He also expressed their strong commitment to fair access and transparency as a new trading venue.
As a result, in order to differentiate themselves from other recent ATSs, they do not plan to operate any hosted or private order books.
“Some of the other advantages of launching a trading venue today enables us to build using a more modern technology stack, achieving better latency and resiliency from an infrastructure standpoint,” he said.
Azmoon outlined the product roadmap, indicating plans to launch two order books in 2025, with a potential third order book slated for 2026, and additional expansion targets to hopefully follow.
He highlighted that BLOX Markets has garnered significant interest from several retail brokers and other market participants including the buy-side, sell-side and wholesale market makers.
”More importantly, we’ve designed a trading venue to successfully operate in today’s markets as is and have game plans to adjust for tomorrow’s changes as we need to pivot,” he concluded.
