Liquidity & Electronic Trading special report
![liquidity-waters-june2011 liquidity-waters-june2011](/sites/default/files/styles/landscape_750_463/public/import/IMG/401/179401/liquidity-waters-june2011-580x358.JPG.webp?itok=KAGNyjk_)
Click here to download the PDF
Olympic-sized pools
In this Waters special report examining liquidity in the markets, our roundtable feature asked a number of capital markets firms and service providers how they think regulatory changes intended to reshape market structure will in turn affect flows of liquidity. Their answers appear to point the way to one big pool in our future.
Executives from Fidelity and Goldman Sachs, when asked how the Securities and Exchange Commission (SEC)-proposed market structure changes and the European Commission's Markets in Financial Instruments Directive II (MiFID II) will change the flow of liquidity, indicated they believe fragmentation or tiering of markets is not on the horizon.
While more trades have gone to dark markets in the past two years and with the SEC's trade-at regulation on the way, paradoxically these capital markets executives see fragmentation of markets declining. As Mike Cashel of Fidelity Capital Markets says, "While fragmentation [now] may be at a peak, the markets today are more connected and consolidated from an access to liquidity point of view than they ever have been."
Still, even without fragmentation causing disadvantages for some market participants, we wondered if there might also be a divide between large firms that can build their own smart order-routers and smaller firms that use external order-routing providers. Smaller firms can buy into and leverage the tools of larger ones, Adam Mazur, global head of connectivity at Goldman Sachs Electronic Trading, tells us.
With interconnection of once-fragmented markets now well developed, and the interest of large firms in providing their advantages -for an affordable fee-to smaller firms, liquidity flows as freely as it ever has. That is also evident when, as Mazur observes, most remaining untapped liquidity is from existing sources rather than new discoveries. If liquidity is no longer fragmented or divided into a two-tier market, one can only conclude the markets have indeed become one giant free-flowing liquidity pool, regardless of how many pipes it takes to make it so.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Trading Tech
Banks fret over vendor contracts as Dora deadline looms
Thousands of vendor contracts will need repapering to comply with EU’s new digital resilience rules
Where have all the exchange platform providers gone?
The IMD Wrap: Running an exchange is a profitable business. The margins on market data sales alone can be staggering. And since every exchange needs a reliable and efficient exchange technology stack, Max asks why more vendors aren’t diving into this space.
This Week: Trading Technologies completes ANS deal; State Street; Equinix; and more
A summary of the latest financial technology news.
Interactive Brokers looks beyond US borders for growth opportunities
As retail trading has grown in volume and importance, Interactive Brokers and others are expanding international offerings and marketing abroad.
JP Morgan’s goal of STP in loans materializes on Versana’s platform
The accomplishment highlights the budding digitization of private credit, though it’s still a long road ahead.
As data volumes explode, expect more outages
Waters Wrap: At least for those unprepared—though preparation is no easy task—says Anthony.
This Week: ICE Bonds and MarketAxess plan to connect liquidity networks, TS Imagine, Bloomberg, and more
A summary of the latest financial technology news.
Industry associations say ECB cloud guidelines clash with EU’s Dora
Responses from industry participants on the European Central Bank’s guidelines are expected in the coming weeks.