Instinet launches its anonymous, block trading platform BlockCross in Japan

Rick Steves

Instinet’s launch of BlockCross in Japan addresses the complexities of executing large blocks in fragmented markets. The ATS offers distinct features and substantial liquidity, facilitating efficient and anonymous large trade executions with minimal market impact.

Instinet, a Nomura-owned agency broker, has launched BlockCross in Japan. BlockCross is now linked to NX, Nomura’s dark pool in Japan.

Nomura’s partnership and connection to NX dark pool are seen as key to elevating execution performance for investors. Japan’s market significance is underlined by global investor interest and market volumes.

Instinet’s anonymous crossing technology with Nomura’s balance sheet

Competition in Japan intensified after Cboe Global Markets acquired Chi-X Asia Pacific. Cboe Japan transitioned to Cboe technology, launching Cboe BIDS Japan, a large-in-scale trading platform.

A Coalition Greenwich report shows that only 24% of domestic Japanese institutions use algorithmic trading, compared to 36% of offshore institutions. By 2025, foreign investors plan to execute over half of their Japanese equity trades via algorithms.

Domestic institutions favor portfolio trades, which are expected to account for 36% of their equity trading volume in 2025. This preference drives differentiation in banks’ offerings, with domestic banks focusing on portfolio trading and foreign banks on algorithmic capabilities.

Ned Millington Buck, Head of BlockCross at Instinet Asia Pacific, described this launch as a significant milestone. The platform combines Instinet’s anonymous crossing technology with Nomura’s client franchise and balance sheet strength. Millington Buck noted the importance of sourcing quality block liquidity in Japan’s sophisticated market. “Leveraging the broad capabilities and harmonized expertise of Nomura & Instinet’s unified Global Execution Services (GES) platform, we offer clients a solution that incorporates the anonymous blotter-integrated crossing technology of Instinet’s BlockCross with Nomura’s scale, strength of client franchise and balance sheet.”

The complexities of executing large blocks in fragmented markets

Instinet’s launch of BlockCross in Japan addresses the complexities of executing large blocks in fragmented markets. The ATS offers distinct features and substantial liquidity, facilitating efficient and anonymous large trade executions with minimal market impact.

Diverse Liquidity Access: BlockCross enables crossing with natural liquidity from various buy- and sell-side entities. Instinet’s extensive client base, spanning portfolio trading, commission management, and research businesses, enhances liquidity opportunities within BlockCross.

Blotter Integration: BlockCross features bespoke order blotter integration, allowing tailored ATS interaction directly from the user’s front end. This functionality includes setting alerts, responding to natural liquidity opportunities, configuring auto-execution, signaling interest to specific counterparties, and optimizing block trade strategies.

BlockCross Desktop: The proprietary interface of BlockCross offers a range of customizable controls. Users can manage orders, confirm or respond to auto-execution opportunities, and interact with Indications of Interest (IOIs) through this platform.

Integration with Instinet’s Algos: Desktop users benefit from seamless integration with Instinet’s advanced algorithmic suite, enabling onward routing of orders to the market.

Opportunity Cost Management: BlockCross allows users to access trading opportunities while working their order, enhancing control and aiding in achieving best execution.

Conditional Workflow: The platform supports conditional order types, allowing users to capture opportunistic crossing executions among a broad range of symbols and participants.

Ease of Access: BlockCross is accessible through integration with leading Order Management Systems/Execution Management Systems (OMS/EMS), Instinet’s Experts algorithms, or via a direct FIX connection.

Optimized Participation Strategies: Users can proactively engage with BlockCross’s continuous crossing opportunities or passively work their orders, leveraging the ATS’s unique features.

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