Independent Evaluation of Instinet Europe’s SmartRouter Finds it Delivers Near Perfect
Results, Providing an Effective Spread Reduction of 10 Percent
Intelligent Financial Systems also finds agency-only broker’s European smart routing
technology provides an average of 1.12 bps of overall price improvement.
NEWS RELEASE: London, 21 April 2011
Instinet Incorporated, a global leader in electronic trading and agency-only brokerage services,
today announced that Intelligent Financial Systems Limited’s (IFS) independent evaluation of
Instinet Europe Limited’s SmartRouter found that by value traded, its ability to identify and
achieve the best possible displayed price was within 99.9997 percent of perfection for its
March 2011 UK equities trades. IFS also found that the technology, which accesses both dark
and lit liquidity, provided an average of 1.12 bps in overall price improvement* and an
effective spread reduction of 10 percent.
Commenting on the findings, Richard Balarkas, CEO of Instinet Europe, said: “As a result of the fragmentation
that has occurred in the European equity markets following MiFID’s introduction, we have focused on measuring
the execution performance of our SmartRouter, which is core to our ability to capture the best available price
and liquidity opportunities for our clients. As part of this effort, and reflecting the complexity of markets
in which the price of a single stock may change more than 1,000 times a second across multiple lit and dark
venues, we believed it was important to use IFS, a leading consolidator of accurate tick data, to perform
the independent evaluation. While we are delighted that IFS concluded that by value traded Instinet’s ability
to identify and achieve the best possible price was within 99.9997 percent of perfection, rest assured that
we’re working on the other 0.0003 percent!”
IFS’ LiquidMetrix WorkStation product suite, which was used to monitor Instinet Europe’s performance, provides
access to a multi-terabyte, consolidated, full-depth (Level 2) order book history covering instruments traded
in Europe on Primary Exchanges, MTFs or off book. With the LiquidMetrix WorkStation, Instinet Europe was able
to analyse the performance of its trade flow on individual and multiple trading venues with millisecond
precision, a standard far in excess of that normally expected by regulators. The actual and potential price
improvement for each executed trade using “depth weighted” and “touch” reference prices were measured. The
analysis can also be performed across the entire trade set or filtered by attributes including client,
counter party, trading desk, order size and trading strategy.
Sabine Toulson, Managing Director of IFS, commented: “We are pleased that we were able to help Instinet Europe
analyse its millions of monthly trades using the LiquidMetrix WorkStation. Our service allows the most
technically advanced brokers such as Instinet to assess their performance in today’s fragmented and fast moving equity markets.”
* Price improvement is defined as the difference between the Instinet execution price and the best quoted
price at the time of execution.
For further information:
Intelligent Financial Systems: Mark Holloway, LiquidMetrix, +44 (0) 20 7379 7328, firstname.lastname@example.org
Instinet: Julia Streets / Sybille Mueller, Streets Consulting Ltd. for Instinet Europe Limited, + 44 (0)20 7959 2235, Julia.email@example.com/Sybille.firstname.lastname@example.org
About Intelligent Financial Systems
Intelligent Financial Systems (IFS) is a London based software and market data company providing a range
of historical and real time market data analysis services. Since the implementation of MiFID in 2007,
IFS have developed a suite of services under the LiquidMetrix brand focused on transaction cost analysis,
Best Execution compliance and pre-trade cost prediction for Europe’s increasingly fragmented equity markets.
Since autumn 2009, IFS is offering these services via its LiquidMetrix WorkStation terminal.
These services operate using a proprietary multi-terabyte database of full depth order book data
covering major European equity Exchanges and MTFs.
For more information about LiquidMetrix visit www.liquidmetrix.com
Instinet is an electronic trading pioneer, having established the world’s first major electronic trading
venue in 1969, one of the first recognized U.S. ECNs in 1997 and the first pan-European MTF in 2007.
Through its subsidiaries and affiliates, Instinet operates two distinct business lines: a global network
of agency-only brokers that seek to help institutions lower overall trading costs and improve investment
performance through the use of innovative electronic trading products, including smart-routing, algorithms,
DMA, TCA, dark pools and EMS platforms, and also provide sales trading, commission management services and
independent research; and the Chi-X® Global businesses, which aim to improve the efficiency of capital
markets globally by providing high-performance, low-cost alternative execution venues and the technology
required to power them. Instinet is a wholly-owned subsidiary of Nomura Holdings, Inc.
For more information, please visit
or follow Instinet on