London - Instinet Europe and Virtu Financial Ireland have entered into a bilateral liquidity streaming relationship.
This relationship provides Instinet's buy and sell side clients with aggregated liquidity and opportunities for price improvement. Instinet clients now have access to additional liquidity at the touch, filling a gap between lit venues and large in scale blocks.
Instinet's agency aggregation services already connect to conditional and over the counter (OTC) liquidity venues, as well as exchanges and Multilateral Trading Facilities (MTF).
The liquidity streaming relationship also provides clients with new options to interact with market maker liquidity. Clients remain anonymous but the arrangement provides the liquidity provider with Instinet as a known counterparty, to which the liquidity provider can offer price improvement and larger size.
As the marketplace anticipates MiFID II regulatory changes to liquidity provision, a shift toward bilateral trading relationships and the registration of additional Systematic Internalisers (SIs), market participants will be required to change the way they route orders, interact with, and access sources of liquidity.
"The trading environment is poised to become even more complex, while at the same time, clients will be asked to attest to their best execution practices. Instinet's highly configurable infrastructure can be tailored to each client, which enables us to serve as their agency-model hub or neutral curator of diverse sources of liquidity," said Richard Parsons, CEO of Instinet Europe Limited.