Electronic broker Instinet and Credit Suisse's Advanced Execution Services (AES) unit have agreed to provide their institutional clients with access to each other's "dark" liquidity pools.
Instinet says the reciprocal deal links institutional order flow from Credit Suisse's CrossFinder system to its Continuous Block Cross (CBX) platform to increasing institutions' chances of executing larger trades with minimal market impact.
Under the terms of the deal, Credit Suisse's CrossFinder will become an additional liquidity pool that Instinet's Nighthawk algorithm sweeps, while Instinet's CBX will be added as a liquidity source to Credit Suisse's Guerrilla algorithm.
The agreement also calls for each firm's suite of algorithms to be available through the other's trading front ends.
Michael Plunkett, president, North America at Instinet, says the recent evolution of the equity markets has produced exponential growth in 'dark' liquidity pools, and this has fragmented markets and created "a logistical nightmare" for our institutional clients.
"We are addressing this issue by opening up our CBX to Credit Suisse's institutional order flow and, simultaneously, offering Instinet's institutional clients access to CrossFinder," says Plunkett. "Our goal is to solve the buy side's new frustration by creating partnerships that enhance access to liquidity while continuing to provide anonymity."
Dan Mathisson, MD and head of AES at Credit Suisse, says: "Being able to access the combined liquidity will enhance performance and increase fill rates throughout the entire suite of AES algorithms."