Dark Pool Operator Liquidnet Activates Dublin MTF Ahead of Brexit

Liquidnet began preparations to open an EEA-based presence as a post-Brexit base of operations in early 2017.

Liquidnet, an institutional trading and equities network, said it has activated and started onboarding trading clients to its recently established Dublin-based multilateral trading facility (MTF).

Liquidnet began preparations to open an EEA-based presence as a post-Brexit base of operations in early 2017. The Dublin MTF, which will act as an agency broker, also received Central Bank of Ireland authorisation as an investment firm under the MiFID II.

Liquidnet and other companies running trading venues such as multilateral-trading facilities are establishing European bases ahead of the UK’s departure from the European Union.

Refinitiv, Plato Partnership and the DTCC all confirmed new operations based in the Irish capital to continue providing services to its clients based in the European Union regardless of the outcome of Brexit.

Meanwhile, Tradeweb, MarketAxess and NEX Group have already chosen Amsterdam as their post-Brexit base, while Goldman Sachs is seeking authorization to relocate its stocks dark pool from London to Paris.

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Contingency Plans in Case Britain Crashes Out of the EU

The current transition deal allows cross-border financial services to continue uninterrupted only until the end of 2020. But, after UK leaders fail to have their divorce settlement passed, this would leave EU customers cut off from the UK-based market operators if no contingency measures are set in place.

Liquidnet is known for operating dark pools that allow institutional investors to trade stocks anonymously. Since launching in September 2015, Liquidnet’s community of fixed income asset managers is now more than 1,000 asset management and hedge fund clients, who collectively manage $33 trillion in equity and fixed-income assets. This growth has been fueled by members’ ability to trade in institutional size with an average execution of $2.4 million.

Additionally, Liquidnet has been expanding its portfolio by buying more AI and alternative data offerings. The first step was the acquisition of OTAS Technologies in 2017, followed by RSRCHXchange and Prattle in 2019.

In October, TP ICAP confirmed plans to acquire Liquidnet in a proposed deal that values the US broker between $600 million and $700 million.

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