Instinet Europe’s chief executive has claimed that many of MiFID’s benefits “are illusory to the end-investor”, despite the agency broker reporting that it had achieved an average of 5.72 basis points of price improvement for clients in Q4 2008.
“We pass all price improvement back to our customers,” asserted Instinet Europe’s Richard Balarkas. “But there are a whole host of models on the sell-side. There seems to be little appreciation on the buy-side of the opportunity cost of using a broker that internalises a large percentage of flow, compared to one that opens up to as many external venues as possible,” he said.
Price improvement is generally defined as the difference between execution price and the best quoted price on the primary exchange at a given time. Instinet Europe data is based only on executions that remove liquidity from MTFs over the period in question.
Instinet Europe said it routed nearly 28% of its European equity trades away from primary exchanges by value traded in Q4 2008. The agency broker was among the first sell-side firms to connect to the multilateral trading facilities (MTFs) launched last year: BATS Europe, Nasdaq OMX Europe, Turquoise and dark pool NYFIX Euro Millennium. During 2008, the firm also executed the first trade on SWX’s Swiss Block dark pool, launched its own MTF, BlockMatch, and, along with Credit Suisse, became the first broker in Europe to offer reciprocal dark pool access. Instinet Europe executed 35.42% of its trades in French, German, Dutch and UK stocks on MTFs in the final quarter of 2008.
No comments:
Post a Comment