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THE OFFICIAL NEWSPAPER OF TRADETECH 2023
Buy-side
Around 60 % of European buy-side equity traders at Tier 1 institutions listed access to dark pool liquidity as a key selection criteria for algorithmic trading , a Coalition Greenwich report has found . While only the second in terms of priority for traders following ease of use and reliability , access to dark pool liquidity saw the greatest leap in demand across all of Coalition ’ s respondent segments over a 12-month period . Tier 1 institutions – reflecting 13 major firms surveyed – saw the greatest increase from 47 % of respondents in 2021 to 62 % in 2022 . When looking at the total number of respondents to the study , some 97 institutions , the jump in demand for dark pool access was less pronounced across a 12 month-period only increasing by 3 % to 63 % in 2022 suggesting institutions outside of Tier 1 have been quicker to cotton on to the need for dark pool access when selecting their algorithms . “ While US dark pool prowess is generally focused on a broker ’ s ability to source unique liquidity ( that which tends to reside in one pool over others ), in Europe overall access to the various dark pools is still a strong differentiator ,” said Coalition Greenwich in its report . The European equities space has become increasingly bloody in recent years thanks to declining commissions , increased fees and the need for expensive market data . This fiercely competitive environment has encouraged brokers to launch new offerings in a bid
Tier 1 buy-side equity traders are realising the importance of algos for dark liquidity access , finds new report
COALITION GREENWICH FINDS THAT ALGORITHMS ’ ACCESS TO DARK LIQUIDITY SAW THE LARGEST INCREASE IN DEMAND FROM TIER 1 EUROPEAN EQUITY TRADERS FROM 2021 TO 2022 .
to differentiate themselves as evidenced by the breadth of algorithms now available to the buy-side in the market . Coalition Greenwich ’ s survey found the algorithmic trading space to be intensely concentrated , with 116 Europe-based buy-side equity traders allocating upwards of a third of their electronic trading commissions to their lead brokers and two-thirds overall to their top three . “ With managers concentrating their wallet share with their best brokers , it ’ s more vital than ever for the sell-side to align their algo platform offerings with what their clients and prospects want and ( more importantly ) will actually pay for ,” said Coalition Greenwich .
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