Imperative Execution, a financial technology company that created IntelligentCross, a new trading venue for institutional investors, announced it has completed a $9 million Series A round of financing. The investment round included participation from prominent buy side firms, industry executives and leading venture capital funds. It follows a $5 million five-investor seed round in 2017 and provides Imperative Execution with funding to grow IntelligentCross, launched in September. IntelligentCross is a smart venue, pioneering the use of Artificial Intelligence (AI) at the venue level. It uses AI-assisted scheduled matching, engineered to reduce market impact – a key implicit cost of trading.
Roman Ginis, Founder & CEO of Imperative Execution, commented: We founded Imperative to create more efficient markets. Market efficiency for institutions is about market impact – a measure of price dislocation during trade execution. It affects everyone with an investment account from Main Street to Wall Street. The brokerage community has done an impressive job of developing advanced execution algorithms to help with this, but trading venues – exchanges and alternative trading systems that match buyers and sellers – have lagged in innovation. We believe our approach to market design, building smart venues that optimize for investor objectives, has the potential to truly transform trading in the same way that smartphones have transformed our communications. We are pleased to secure this next round of funding to pursue our mission to make the market more efficient.
Larry Tabb, Founder and Chairman of Tabb Group, commented: The impact of institutional investors trades on the market has been one of the most significant issues since the days of the Buttonwood tree. The average US equities transaction size has dropped below 200 shares per trade, which has made this challenge even more pressing. The application of AI to dynamically address this problem has the potential to be a game changer, and early results are truly encouraging.
IntelligentCross is currently accessible through major electronic execution providers. Its key features are as follows:
- Focused on Performance: IntelligentCross is built to minimize market response after each trade. Lower market response implies lower information leakage, crucial for institutional investors seeking to avoid moving the market.
- Dynamic: IntelligentCross matches orders at scheduled times, typically milliseconds apart. Each match is at the market midpoint (NBBO mid). What makes the venue intelligent is an AI-assisted process that calibrates the match schedule per security, based on the actual market response to its trades. This closed-loop measure-optimize-calibrate type of AI allows the venue to adapt to market conditions and continuously improve to help traders achieve their performance objectives.
- Simple: IntelligentCross has a single order type (mid peg) that seamlessly fits into todays electronic execution workflow, requiring no programming or changes to brokers algorithmic suite or the buy sides order entry process.
