Whitepaper: 2nd Age of Smart Order Routing – April 2009

Executive Summary

This paper discusses the evolving challenge of liquidity fragmentation as a result of business, technology and regulatory pressures within capital markets. Fragmentation has accelerated in the past 24 months in both the US and European equities markets due to the implementation of RegNMS and MIFID. However, the rapid growth of liquidity has predominantly been due to the new wave of technologies being deployed.

Both buy and sell-side organisations implent a number of solutions to address liquidity fragmentation incorporating execution strategies such as smart order routing, algorithmic trading, internalisation and dark pools. However trades are becoming harder to execute, due the ever growing number of liquidity venues, and the market is therefore having to adapt to deal with the increasing challenges facing it. The following paper outlines the current trends, difficulties and solutions to better succeed in this evolving market where only those investing intelligently in the right technology today will undoubtedly be tomorrow’s winners.