Barclays has introduced an automated capital commitment feature available through select equity algorithmic trading strategies in EMEA. This new functionality, called capital commitment, allows clients to partner with Barclays in creating liquidity and transferring risk.
"After the recent successful launch of the capital commitment feature in the US, we are pleased to be offering this functionality to clients that execute with us in EMEA," said Eric Krueger, Head of Programme and Electronic Sales EMEA. 'This is an innovative way that Barclays can offer liquidity to our clients in both an automated and anonymous manner. Sourcing liquidity is a challenge in this market environment- and this is one of may ways that Barclays is attempting to address our clients' needs in this area."
Clients must be entitled by Barclays before they can use the capital commitment feature. Once set up, clients can select the feature on a per-order basis through a simple check box on their algorithmic order screen. Barclays determines the level of facilitation in advance with each client based on liquidity needs, and may revise it based on quantitative evaluation.
With the capital commitment feature enabled, a portion of the client's order is automatically transferred to Barclays' central risk management book, thereby providing the client with instant liquidity as well as saving them the execution cost associated with that portion. The firm launched the feature in the US in April 2013, with very positive client feedback.
"This feature helps simplify our clients work flow, addresses clients concerns around souring liquidity and may pass back significant price improvement," said Nej D'Jelal, Head of Equities Electronic Trading Product, EMEA. "Our liquidity is a unique asset and we will continue to look for new ways to expose this to our clients."
The launch of the automated capital commitment feature is the latest among recent initiatives from Barclays aimed at making liquidity capture more efficient for clients. In March 2013, Barclays began reporting its electronic trade volumes for EMEA equities on the Bloomberg Professional service to give clients more transparency into the firm's liquidity.