Institutional dark pool network Liquidnet is preparing for changes to European Union markets regulation through the acquisition of a global provider of equity analytics.
OTAS Technologies, established in 2011, currently provides equity market analytics and brokerage insights for more than 60 financial institutions worldwide. Liquidnet said the acquisition will assist its buy-side clients in making better-informed trading decisions through the lens of the EU's new Markets in Financial Instruments Directive II (MiFID II) regulation.
MiFID II will have wide-ranging effects on global markets, especially with regards to the new obligation for buy-side traders that they, regardless of the market in which they're operating, demonstrate their efforts to achieve "best execution" every time they deal with European securities.
OTAS' platform is MiFID II-ready and will integrate with Liquidnet's Virtual High Touch (VHT) tool suite, which was launched in November 2016.
"The biggest challenges we hear from our buy-side members today centre on two things - finding the liquidity they need, and being able to sort through vast amounts of market information to access what's relevant," Liquidnet global head of equity strategy Rob Laible said.
"Our goal with this acquisition is to bring OTAS' analytics into the Liquidnet platform and deliver market context directly to the trader at the point of execution."
OTAS founder and chief executive Tom Doris said: "Asset managers need a global partner that understands the complexities of market structure, compliance, and liquidity, and can bring to bear the tools and technology that are most relevant and impactful for the buy-side trader."
"By joining with Liquidnet, we are helping clients achieve their performance objective by delivering a more complete trader intelligence platform that can help address all parts of the trading process: finding liquidity; measuring potential trade impact; monitoring marketing conditions; and now supporting a best execution strategy on an order-by-order level."