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Trail) advisory boards among others, took home the Buy-side Market Structure Expert of the Year Award at Leaders in Trading New York 2024 after multiple industry nominations by peers and clients. The Philadelphia-based director of equity trading confirms she is increasingly keeping tabs on market fragmentation in the US. This, she explains, is one of the market structure themes having the greatest impact on the US equities landscape today.
Fragmentation is no new phenomena in Europe which has three times the number of exchanges as the US, 10 times the number of listing venues and 20 times as many post-trade providers and is an issue that comes up time and time again in the ongoing debate around the health of the liquidity landscape in the region.
However, as noted by Hinmon and other market structure specialists, thanks to the launch of new national exchanges, the proliferation of private rooms within venues and the growth of the single dealer, bilateral and off-exchange segments, the US
“ It [ activity on the trading floor ] was like a freight train coming. You could feel the rumbling in the tracks.” market has become fragmented to the point that many market structure experts are keeping a watchful eye to see how it further develops.
Private rooms have taken off in the US in the last year. Currently the concept – whereby a venue offers a select number of participants the opportunity to create a closed pool where they can interact with one another – is not permitted under EU regulation. However, in the US, as the number of venues increases, so too does the opportunity to fragment things further through more private rooms.
“ What will the consequences be of the launch of the four or five new national exchanges?” asks Hinmon.“ We already have 16. What does it look like if we have 21? That ' s a big deal. It ' s something that hasn ' t been corrected in years.”
In making her point, the director of equity trading quotes several market structure sell-side partners that have all published data in recent months unpacking the ongoing theme of fragmentation, and what is and is not addressable for US traders.
Among the names is Jenny Hadiaris at Citi. According to Hadiaris, just over 25 % of total market volume in the US in 2024 was addressable singlestock liquidity for institutional investors if ETF, sub $ 5 stock, market making and some wholesale retail activity is removed from the equation.
“ It needs to be corrected. I don ' t know what the solution is. If I could come up with the solution, I ' d probably be able to retire tomorrow,” says Hinmon.
The increased fragmentation is also causing trading flow to
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