Buy-side institutions have directly and anonymously traded over A$1 billion in Australian securities through Liquidnet Australia, an electronic marketplace that facilitates institutional equities trading for asset management firms worldwide, since the firm began operations in February. Member adoption for the Australian firm has proven to be the most successful launch of US-based Liquidnet's 29 markets worldwide, with trade sizes averaging A$1.8 million, more than 100 times the A$16,500 average trade size on the Australian Stock Exchange, according to the firm.
The group's progress in Australia precedes the decision by the Australian federal government to open the market to competition and grant Liquidnet an Australian Markets License, which allows it to execute trades free of ASX crossing rules and without using a broker intermediary. "The Australian buy-side community has jumped at the opportunity to anonymously access block liquidity. They have demonstrated true leadership in their early adoption, which benefits the individuals for whom they invest," says Liquidnet co-head Stephen Zilioli.
Timing has also contributed to the group's local success according to co-head Sam Macqueen. "Liquidnet brings to the table a critical mass of liquidity from its existing global member base at a time when local traders are frustrated at having to trade wholesale volumes in a retail orientated market," she says.