Buy side firms are increasingly looking to alternative trading systems (ATS) to execute block trades, including those that are based on peer-to-peer technology, says a new report from Meridien Research.
The report, "Speed Dating for the Buy Side: Alternate Block Trade Execution," suggests that this trend will continue as long as the current marketplace and technologies do not easily lend themselves to anonymous trading. But if this is overcome, says Meridien, then the peer-to-peer model will face real competition.
According to Damon Kovelsky, analyst at Meridien Research, institutional investors currently make up about 50 per cent of all US equity trading. He says: "There is a huge amount of block trade activity that is slowly being shifted to alternative trading systems such as the peer-to-peer model. We believe this trend will continue until current marketplaces can provide truly anonymous trading environments."