Instinet Incorporated, a global leader in electronic trading and agency-only brokerage services, today announced that the BlockMatch dark MTF operated by its Instinet Europe Limited subsidiary has been granted approval by the United Kingdom Financial Services Authority (FSA) and the European Securities and Markets Authority (ESMA) to reference a consolidated European Best Bid and Offer (EBBO).
Currently, dark MTFs reference the pricing of a security's listing exchange when determining the best and mid-point quotes. However, this provides an increasingly incomplete snapshot, as upwards of 30 percent of many securities' turnover trades on alternative displayed venues.
Instead, BlockMatch will offer the opportunity to trade at the best bid, best offer or mid-point price based on a consolidated price feed of the major displayed trading venues in Europe. The functionality is expected to be introduced in the first quarter of 2012. The Instinet EBBO will be compiled using the same core technology that powers its award-winning European SmartRouter, which was found by Intelligent Financial Systems (IFS) to have identified and achieved the best possible displayed price for UK equity trades 99.9998 percent of the time in Q3 2011.
Commenting on the approval, Richard Balarkas, President and Chief Executive Officer of Instinet Europe, said, "The lack of consolidated pricing data has been one of the most significant criticisms made of MiFID by institutional investors. We are obviously delighted to have obtained approval from the FSA and ESMA to reference a fully consolidated EBBO in BlockMatch, and expect to be the first dark trading venue to provide such an offering."
BlockMatch has been registered as an MTF with the FSA since 2007 and was the first broker-operated dark pool to be designated as such. Access to the platform is available to both the buyside and sellside through Instinet's Newport® 3 EMS, the Execution Experts algorithms, its European SmartRouter, multiple third party trading systems or direct FIX connection.
BlockMatch has grown its matched value throughout 2011; on 4 November, the platform executed a firm record $678 million (USD).