Liquidnet launches SuperBlock Matching for equities trading

Rick Steves

“The creation of a protected space to trade the most challenging blocks is a direct response to a request from our Membership and is an extension of our existing block trading offering, to facilitate more complex and nuanced trades.”

Block trading

Liquidnet has announced the launchf of SuperBlock Matching, an initiative to the Liquidnet equities application that brings new functionality where traders can signal and participate in exceptionally large or illiquid block trades with a single click.

SuperBlock minimum trade size will vary by market and each stock’s market capitalization, focused on assisting with the most difficult executions and orders.

“A protected space to trade the most challenging blocks”

By leveraging the firm’s extensive global buy-side community and expertise in facilitating block trades, this new solution suite aims to make it even easier to execute very large blocks of stock within a highly trusted environment.

SuperBlock Matching offers members the choice to match with each other in a fundamentally different way, and offers further control over the execution of their most difficult blocks.

Mark Govoni, CEO of Liquidnet, said: “Our SuperBlock initiative is a testament to the trusted relationship we have with our Members. The creation of a protected space to trade the most challenging blocks is a direct response to a request from our Membership and is an extension of our existing block trading offering, to facilitate more complex and nuanced trades.”

Rob Cranston, Global Head of Equities Product at Liquidnet, said: “SuperBlock Matching is another success from our innovation hub, Liquidnet Labs. A little under a year ago we tested and validated this concept with our Membership community. Fast-forward to today and we have an efficient environment that we believe will significantly improve opportunities for members to systematically trade very large blocks.”

Last year, Liquidnet partnered with TP ICAP Midcap to increase block liquidity opportunities in European Small and Mid-Caps (SMEs). Addressing issues related to liquidity and execution for Liquidnet’s members, the partnership also expanded upon its acquisition by TP ICAP.

Dealers are now able to access digital tools for debt capital markets, including the new issues, through TP ICAP’s electronic portal Fusion – which also enables users to access the group’s aggregated liquidity and post-trade services. The strategic integration leverages the existing geographic infrastructure and expertise within the TP ICAP Group.

Block trading on the rise

Block trading is a practice in financial markets where large trades are executed outside of the public market on a bilateral basis between two parties. This type of trading is particularly important for institutional investors who need to execute large trades without causing significant market disruption or price movements.

In Europe and the UK post-Brexit, there has been ongoing regulatory debate around block trading, particularly with regard to the use of systematic internalizers (SIs). SIs are firms that execute client orders on their own account and are subject to less stringent regulatory requirements than public exchanges.

Under MiFID II regulations, SIs are allowed to execute large block trades without pre-trade transparency requirements. However, there has been concern that this could lead to a lack of transparency and potential abuse of the system.

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