Liquidnet, the institutional alternative trading system (ATS), has signed an agreement with Capis, a leading soft dollar broker with more than 1000 institutional clients, to automate the payment of member bills during the execution of large blocks of stock.
The agreement removes one of the industry's most significant obstacles to realising best execution says Liquidnet - the need for firms to satisfy soft dollar commitments with traditional brokers at the risk of greater market impact or sacrificed price improvement.
Late last year, Liquidnet signed a similar agreement with Westminster Research Associates.
"Our goal is to eliminate the barriers our members may encounter in achieving best execution, and the need to 'pay bills' has been the overriding challenge these firms face," says Seth Merrin, CEO of Liquidnet. "By teaming with Capis we are able to expand our soft dollar programme to reach a significantly greater percentage of our members, giving them the freedom to execute large blocks of stock directly and anonymously, while still honouring their bills for traditional trading and research services with outside vendors and brokers."