MiFID II will most likely change how and where trading is done in Europe. We can expect the emergence of a new market landscape as well as new market models. To remain competitive, banks and brokers must be flexible, fast and able to cope with a drastic increase in market complexity, regulatory requirements and competitive pressure.
The new Itiviti Smart Order Router is extremely flexible and configurable, enabling investment firms to adapt quickly to drastic changes. It handles multiple asset classes, including equities, ETFs and derivatives. It offers super-fast and intelligent routing to new venue types, enabling firms to manage a radically more complex and highly fragmented landscape.
Key strengths of the Itiviti Smart Order Router:
- Performance — Execute with confidence. Built upon the ultra-fast Tbricks by Itiviti platform, performance is imprinted in this SOR’s DNA. However, performance involves more than low latency in a smart order router; predicable and consistent execution, all the time, are equally important.
- Resilience – Manage and control unexpected market behavior before it has a negative impact on your business. Leverage automated controls as well as tools for manual intervention.
- Flexibility – Be prepared for known and unknown uncertainty. The Itiviti SOR is configured to be extremely flexible, but not everything can be predicted. That is why we ship the Itiviti’ SOR along with the complete source code and development tools, ready for you to change as required. You never know where the market will go tomorrow. Add as much flexibility as possible through configuration. Build your own strategies by extending what we deliver. Full source code access to the apps.
- Traceability – Know where, see how and understand why. The Itiviti SOR provides extensive audit capacity in near real time, providing access to all decisions of where, how and why orders have been routed. The audit log includes routing decisions and order book snapshots, enabling firms to provide timely answers to any request about order execution. Monitoring and reporting are non-intrusive processes with no impact on trading.
The Itiviti Smart Order Router offers four basic, highly configurable routing strategies, composed of one or many execution cycles:
- Systematic Internalisation. Interaction with systematic internalisers include consideration and aggregation of available quotes, but also the ability to use the RFQ facility to request liquidity. The latter can be achieved prior to, or in parallel with, traditional execution.
- Dark trading is used differently depending on the trading objective and horizon. In addition to seeking liquidity at mid prior to crossing the spread, there are advanced dark passive strategies to find liquidity. Contingent orders can be used exclusively, or in parallel with others, to minimize timing risks. The SOR will maintain all relevant MIFID II parameters (e.g. Large in Scale, SSTI, and both voluntary and regulatory caps).
- The Itiviti Smart Order Router will use a sophisticated adaptive order timing to make sure orders are hitting venues at the same time. Additional features include utilization of exchange native dark sweep, and a sticky post to remain in the book after depleting a price level.
- The objective for passive posting is to minimize timing risk by optimizing match likelihood and speed of execution. Posted volume will be split across the eligible venues according to match likelihood based on current market conditions with rebalancing of active volume as fit.