Taking liquidity away from the public order book poses a threat to the buy-side’s ability to discover prices, say top investment managers at the TradeTech securities industry conference held in Paris this week.
While brokers are keen to extol the virtues of their internal crossing engines, arguing they provide both price improvement and reduced market impact, some buy-side CEOs are concerned that the proliferation of off-exchange trading will diminish the ability to value assets effectively.
“The existence of places where you can trade without disclosing the quantity, involvement etc. is not a benefit to anyone on the buy-side and puts end-investors in jeopardy,” said Francois Bonnin, CEO of John Locke Investments, during a panel discussion on how the buy-side is adapting to the changing investment environment.
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