NYSE Euronext and Bids Holdings have announced the launch of their joint venture, the New York Block Exchange, a platform designed to maximize access to liquidity and improve execution
NYSE Euronext and Bids Holdings have announced the launch of their joint venture, the New York Block Exchange, a platform designed to maximize access to liquidity and improve execution quality in the US equity block trading market.
Institutional investors and other market participants can now execute block trades on the new exchange, the first venue of its kind to allow non-displayed liquidity to access anonymously both the displayed and reserve liquidity of the NYSE order book, creating a platform to re-aggregate blocks of stock.
‘Given the speed and complexity of today’s dynamic marketplace, there is a need to resolve the problems inherent in executing block trades in an increasingly fragmented trading environment,’ says Larry Leibowitz, group executive vice president and head of US execution and global technology.
‘As the first platform to unite dark and light sources of liquidity, NYBX will significantly reduce market fragmentation for large orders; electronically replicating traditional block trading. This represents a major advancement in block trading.’
Tim Mahoney, chief executive of Bids Trading, says: ‘Today’s launch of NYBX marks a historic shift in the way market participants can execute block trades, representing a leap forward in the institutional trading environment.
‘Previously, there had been a gap in electronically servicing block trades and we see NYBX as the most efficient trading solution. By combining the anonymity, speed and flexibility of the Bids ATS with the world’s leading exchange, NYBX aims to improve block executions, provide unparalleled price discovery, and reduce fragmentation; giving traders a one-stop block trading service.’
Bids Holdings and the NYSE Euronext each have a 50 per cent ownership stake in NYBX. In addition, NYSE Euronext made an investment in Bids Holdings in October 2006.
NYBX is open to all New York Stock Exchange members and to Bids Trading subscribers via sponsored access. The Bids Alternative Trading System, which is accessible to all broker-dealers, investment managers, hedge funds and algorithms, enables access to NYBX liquidity by allowing subscribers to opt-in on an order-by-order basis. Traders can set different prices and minimum trade sizes in each venue.
To effectively preserve anonymity and manage information leakage, original technology has been created specifically for the NYBX platform. NYBX will continuously search itself, as well as the NYSE order book, trading with displayed orders, reserve orders and hidden interest on the New York Stock Exchange, while keeping the order anonymous.