On the heels of launching Chi-X, an alternative trading system targeting opportunities created by MiFID, Instinet's brokerage arm is developing a second type of ATS for pan-European stocks. Called BlockMatch, the new ATS -- which is scheduled to go live at the end of March -- is geared to executing markets-in-size (trades of 10,000 shares or more) and will utilize indications of interest (IOIs), according to Tony Mackay, president and managing director of Instinet Europe.
While Mackay declines to offer specific details on how the new platform works, he says BlockMatch is designed for institutions and will give the control of the IOI to the buy side, whereas Chi-X, an ECN-like trading platform, is targeted at brokers. "We will have a separate product that will compete with Liquidnet and POSIT, and it's more attuned to the institutional market," Mackay says of the BlockMatch platform.
Unlike Chi-X, where all prices are published, BlockMatch is a dark pool that does not publish prices, Mackay continues. Though the ATS will let brokers participate, "The brokers will have no visibility of BlockMatch at all," he adds. Making BlockMatch sound similar to Liquidnet, Mackay says the ATS will operate like a golf club membership. "You have to be a member of the club, and if you don't behave, they can kick you out," he comments. Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio