Trading firms anxious to attract more institutional business are gearing up to create new exchange-type platforms that will exclude high-frequency traders. The moves reflect the growing concerns of buyside investors about how the activities of high-frequency traders are hampering their ability to conduct large blocks of trades. HFT now accounts for as much as 60% of total market activity, according to analysts.
CA Cheuvreux, the agency broker owned by Credit Agricole (ACA.FR), will this week relaunch Blink, its broker-crossing network, as a multilateral trading facility aimed primarily at institutional investors. Last month, a team left RBC Capital Markets to launch a buyside-only equities platform, as reported by Financial News.
Ian Peacock, global head of execution services at CA Cheuvreux, said: “We want to launch a very clean liquidity pool that contains only high-quality institutional and retail client flows. For asset managers, this is a very attractive proposition.”
Tony Whalley, head of dealing at asset manager Scottish Widows Investment Partnership, said: “The important thing is that people have a choice. If a buyside firm does not want to interact with high-frequency traders and hedge funds, then platforms preventing that sort of activity should be available.”