Nomura and Instinet Enter into Liquidity Agreement For Hong Kong

Nomura has entered into a liquidity agreement with its agency brokerage Instinet and its non-displayed crossing network, NX (NomuraCross) in Hong Kong.

Nomura, the global investment bank, is now receiving orders from Instinet that are being entered directly into NX Hong Kong to provide more liquidity from each firm’s crossing networks. Nomura acquired Instinet in 2006 from US buyout firm Silver Lake Partners for almost $1.2 billion.

Instinet is the first external broker to connect to NX Hong Kong, according to the firm. In a statement, Robert Laible, Nomura’s co-head of electronic sales and head of program sales for Asia, said the reciprocal liquidity access agreement with Instinet is an important step in opening NX in Hong Kong to other sources of liquidity.

“This is the first time we’ve opened up NX Hong Kong to other sources of liquidity, which will increase the crossing rate and further the opportunity for price improvement for our clients,” Laible stated in the release. “I expect we will see further liquidity aggregation amongst brokers in Asia to meet the increasing needs of clients,” he added.

Instinet will connect to NX via its dark liquidity-seeking algorithm, Nighthawk, whose logic is embedded in all strategies in the firm's global Execution Experts algorithmic trading suite. Commenting in the same release, Glenn Lesko, CEO of Instinet in Asia, said the addition of NX to Nighthawk's 12 Asian destinations further cemented Instinet's position as the leader in dark aggregation in the region.

"For years Instinet has helped the buy side navigate the North American and European markets as they fragmented," Lesko said. "In Asia, we're putting our clients well ahead of the curve as the markets here become more complex.”

Nomura went live with NX in Hong Kong in June 2010, after launching in Japan and the U.S in late 2009. In January 2010, it established NX as the first principal broker dealer Multilateral Trading Facility (MTF) dark pool in Europe.

After NX crosses orders, it automatically reports the trades to the Hong Kong Stock Exchange (HKEx). Nomura said by crossing orders in NX, clients benefit from both anonymity and price improvement. Orders placed in NX are not displayed externally or internally, allowing participants to place orders without revealing information, thereby minimizing market impact, Nomura said.

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