Agency broker and financial technology firm Investment Technology Group (ITG) has launched the POSIT Marketplace for trading Australian equities, linking institutional liquidity with other large broker pools and trading venues — something it claims will increase trading efficiency and reduce costs and transaction time.
Trading costs can make millions of dollars of difference to a fund’s performance, according to ITG’s head of sales and trading, Michael Corcoran.
“As best execution — trading as efficiently as possible — becomes a focus for Australian regulators, fund managers and investors, tools such as POSIT Marketplace will be a vital component of Australian market evolution,” he said.
In Hong Kong, the aggregation tool has delivered on average a 10 basis points saving for each trade crossed since its launch in March this year, according to ITG.
The POSIT Marketplace is designed to provide a secure and anonymous venue for institutions to trade without leaking information and thus altering the market price.
By aggregating liquidity from different pools, the marketplace increases the chance of orders being filled quickly, reducing the time it takes for transactions to be completed and thereby reducing delay costs, according to ITG.
There is a need for a solution that keeps track of the different trading venues being introduced, with the Australian trading landscape undergoing significant change, Corcoran said.
“POSIT Marketplace has built a strong global track record of reducing costs and helping institutional traders unite liquidity as markets become more complex,” he said.
“This … should ultimately bring benefits to Australian fund managers and the investors whose money they’re managing.”
