Liquidnet, the global institutional marketplace for equities trading, today announced that it has signed 12 European firms to provide liquidity for its Supernatural offering, which is scheduled to begin pilot testing next month.
Supernatural will bring additional actionable liquidity to its buy-side member community in Europe, providing them with the option to execute orders against flow from Streaming Liquidity Participants (SLPs) such as brokers, exchanges, and MTFs. Liquidnet Supernatural will offer members-who are exclusively buy-side firms-the ability to achieve best execution on more of their orders, without comprising anonymity, information protection or market impact.
The Streaming Liquidity Participants that have signed with Liquidnet include Chi-X Europe, NYSE Euronext, NYSE Arca Europe, Instinet, BATS Europe, Credit Suisse, Deutsche Bank, Sanford Bernstein, CA Cheuvreux, and Nasdaq OMX Europe.
Since 2002, Liquidnet has provided European buy-side members with access to its natural pool, which has become the largest buy-side-only block trading pool in Europe*. With Supernatural, the selected SLPs will provide Liquidnet's buy-side members with additional actionable liquidity, giving them more choice when executing their block orders. SLPs are not members of Liquidnet, and will not have direct access to the Liquidnet system-they will only be able to make their flow available. This ensures that Liquidnet's core values of buy-side anonymity, the prevention of information leakage, and minimised market impact are preserved. Members control what liquidity to access and how aggressively to trade, all via their desktops using a menu of intelligent trading strategies, or via the Liquidnet European Trading Desk. With the addition of Supernatural, Liquidnet's buy-side members can choose to start filling a block order with streaming liquidity via Supernatural whilst waiting for a match in the natural pool, if a match has yet to occur.
Supernatural, which is already available in the US, was approved by the FSA in August. Pilot testing with a select group of Members will begin in October with a full launch to members when the pilot concludes. In the US, Supernatural now provides members with access to actionable liquidity from 25 SLPs.
John Barker, Managing Director of Liquidnet in Europe, said "We're excited to launch Supernatural in Europe and bring our buy-side members additional actionable liquidity from some of Europe's most successful MTFs, exchanges, and agency brokers. Our focus has, and always will be, the buy side. Our members are the biggest and best names in European funds management. They will get first-look, protected access to a large and growing percentage of order flow with the opportunity for price improvement for all participants."
"Supernatural is already a hit in the US, and we expect to mirror that success in Europe in the future," Barker continued. "Supernatural will offer a menu of strategies to intelligently seek out and deliver liquidity directly to Liquidnet's buy-side members, taking away the need to fragment their order amongst multiple external venues. This will allow Liquidnet members to fill more of their orders, more of the time, all auto-executed at the mid. We're giving buy-side traders the liquidity they need, when they need it, without compromising their anonymity or markedly moving the market."
Liquidnet was ranked as top overall broker for equity trade cost performance1 globally according to the 2008 ITG Broker Edge Core Broker2 Global Report, which was published earlier this year. Moreover, Liquidnet surpassed a trading milestone in August 2009, exceeding £5bn in monthly principal traded in European securities for the first time since inception (2002).