Instinet extends liquidity aggregation tech to Japan VWAP crossing platforms

Source: Instinet

Instinet Incorporated today announced the introduction of Nighthawk VWAP, a fully customizable variant of its award-winning Nighthawk algorithm that provides aggregated access to the expanding universe of pre-market VWAP crosses in Japan.

Beginning with Instinet's launch of JapanCrossing™ in 2001 and more recently with the introduction of similar pools in Japan, VWAP crossing platforms have provided an indispensable source of block liquidity through their anonymous, low market impact models. Including the two pre-market matches offered through JapanCrossing, there are now nine such crosses in the market. The VWAP module of Nighthawk, which executed over $3B (USD) of stock in Japan in Q2 2013, provides an efficient, intelligent way to get aggregated access to these crosses via a single destination.

Clients may send orders to Nighthawk VWAP from 00:00 JST onward. Beginning at 08:19 the algorithm begins cycling through the nine crosses, the last of which runs at 08:55. Matched orders receive an "indicative fill" at the stock's previous night closing price, and are re-priced to the full day VWAP shortly after the market close at 15:00. During the month of August, clients saw a cross ratio (e.g., the percentage of total order volume completed) of 28% using Nighthawk VWAP.

"Nighthawk VWAP, like all of Instinet's award-winning liquidity products and technology solutions, is driven by the needs of our clients. Nighthawk's sophisticated liquidity aggregation gained popularity region-wide because it simplifies an important yet complicated process. We're excited to extend its functionality to access these new venues," said Joel Hurewitz, Head of Product Asia-Pacific Product Strategy.

Clients may access Instinet's Nighthawk VWAP platform from Instinet's Newport® EMS, through multiple third-party trading systems or via direct FIX connection.

Nighthawk VWAP is the latest Asia-Pacific-specific product to be launched by Instinet, which has seen a significant enhancement of its capabilities in the region over the past nine months. Since becoming the Nomura Group's equities execution services arm in Hong Kong, Singapore and Australia, Instinet's market share has increased tto 3.1%, 2.9% and 1.7% in those markets, respectively*. Instinet clients are now able to pay for Nomura's award-winning content in the region via Instinet, as well as leverage the Nomura Group's entire AEJ equity trading network, which includes 57 sales/trading staff across nine offices**.

"Clients have responded extremely favorably to Instinet's newly enhanced platform in the region, with the number of active trading accounts more than doubling from January to present," said Shaun Bramham, CEO, Asia-Pacific. "By marrying Instinet's electronic trading product set and agency-only liquidity with the content and capabilities of Nomura's broker dealers, the Nomura Group is today able to provide an equities offering that is without peer."

* Market share for Q2 2013

** Hong Kong, Singapore and Australia exchange memberships are held by Instinet broker dealers; India, Indonesia, Korea, Malaysia, Taiwan and Thailand exchange memberships are held by Nomura broker dealers. 

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