Buy-Side Technology Awards: Best Buy-Side Execution Venue─Liquidnet

"Investor confidence has clearly been impacted by recent market glitches and exchanges favoring high-frequency trading (HFT) with data, co-location, and system upgrades that try to optimize for an additional millisecond," says Per Lovén, head of international corporate strategy at Liquidnet. "Our members know that Liquidnet is an HFT-free zone and they can interact anonymously with a contra to get their block trades executed efficiently. We are continuing to deliver the ability for members to trade in large blocks without the threat of HFT increasing the costs of their trades and effectively taxing anyone who invests in mutual or pension funds."

A LiquidMetrix European fragmentation report, LiquidMetrix Guide to European Dark Pools, by research firm Intelligent Financial Systems, shows that Liquidnet's average trade size of €528,000 ($675,000) was twice as large as number two Icap's BlockCross. Members saved 129 basis points per trade, which was 18 percent better than the next best dark pool it examined.

Liquidnet's average trade size is approximately 50,000 shares in the US and 63,500 in Canada. In 2011, a stock traded on Liquidnet was either the first or second largest print of the day in that stock 62 percent of the time, and over 80 percent of the time in small caps. Also, when Liquidnet traded a stock in 2011, it represented 39 percent of the day's block volume of that name; for small caps, that number rose to 57 percent.

Two new equity markets, Turkey and the Philippines, were recently added to the Liquidnet network, increasing the total number of markets on offer to 41, including nine in high-growth Asia-Pacific. The company views global expansion as a way to provide new and actionable liquidity to its members. Its partnership with SIX Swiss Exchange, which began last year, has continued to evolve, as September and October were record months in terms of trade volumes.