The roll out includes a US/Canadian inter-listed smart order router, the Execution Experts suite of algorithms with full inter-listed capabilities and Instinet’s Newport 3 EMS that includes enhanced Canadian and global trading capabilities.
In Canada, the Experts suite is comprised of a range of benchmark, participation and liquidity sourcing strategies.
In addition, all of the Experts leverage Instinet’s inter-listed smart order router, which will simultaneously work an order on both Canadian and US exchanges, displayed ATSs/ECNs and dark pools to find the optimal execution price based on real-time foreign exchange rates, allowing for single currency settlement.
Instinet has also enhanced the Canadian trading capabilities of Newport 3, Instinet’s multi-asset, broker-neutral execution management system. Through it, users can access Instinet’s entire global product portfolio, as well as other brokers’ offerings.
Instinet Director of Global Trading Research Alison Crosthwait said inter-listed routing functionality gives clients access to the full liquidity and price benefits provided by all markets on which Canadian securities trade, and is crucial for obtaining best execution in an inter-listed security.
During the second half of 2010, Instinet added direct access to nine Canadian broker’s full algorithmic trading suites via Newport 3, bringing the total number in Canada to more than 20.
Additionally, Instinet has begun the regulatory filing process to launch a Canadian ATS. ICX (Instinet Canada Cross) will consist of two dark pools: a pre-market, VWAP (Volume Weighted Average Price) cross, and Instinet BLX, an algo-friendly dark pool that seeks to build block trades by combining the liquidity aggregation benefits of point-in-time crossing with the flexibility of a continuous market.
ICX, which is expected to launch in the first half of 2011, will be based on Instinet’s liquid, globally-deployed dark pool model, and will be powered by Instinet’s proprietary matching technology.
In 2010, Instinet’s Canadian sales and trading group was augmented with the addition of industry veterans Jeff Houslander and Andrew Hill to the trading desk, as well as the hiring of Crosthwait, whose analysis of the US ‘Flash Crash’ and ‘Eleven Market Structure Trends to Watch for in 2011’ pieces have generated considerable industry attention globally.
