ABU DHABI (ALETIHAD)
Abu Dhabi Securities Exchange (ADX) and Virtu Financial have launched an electronic service that will help institutional investors execute large transactions in ADX-listed shares.
The service uses Virtu’s POSIT block-trading indications network to connect ADX members and their institutional clients with a global pool of investors interested in buying or selling large blocks of shares, the two entities said in a statement on Tuesday.
Block trading involves the purchase or sale of a large quantity of shares through a negotiated transaction.
The new service allows institutions to seek liquidity for such transactions through the POSIT network and complete the trades on the ADX platform. According to the statement, this is intended to minimise the effect of large transactions on market prices and limit the disclosure of trading intentions before execution.
The launch follows recent enhancements made by ADX to its Negotiated Block Trade facility, which provide exchange members with greater flexibility to execute large transactions on the platform.
Virtu is the first company to use the upgraded facility to complete electronic block trades sourced through the POSIT system.
All transactions will be settled on a T+2 basis through the Abu Dhabi Central Securities Depository, following the same settlement cycle used for standard ADX trades.
Arqaam Capital, Virtu’s regional partner, will provide connectivity, brokerage and post-trade services to firms that are not direct members of ADX.
The launch represents the first phase of Virtu’s use of POSIT to facilitate block-trading indications for equity securities in the Middle East and North Africa.
Abdulla Salem Alnuaimi, Group Chief Executive Officer of ADX Group, said the introduction of the technology would provide institutions seeking to execute large trades with direct access to additional liquidity opportunities.
“With Virtu as our infrastructure partner, we continue to deepen our global institutional participation and build up our liquidity pool, while preserving the integrity of price discovery on our public order book,” Alnuaimi said.
He added that the partnership formed part of ADX’s efforts to develop a globally connected market for investors and issuers.
Rob Boardman, Chief Executive Officer of Virtu Execution Services for Europe, the Middle East and Africa, said extending POSIT technology to ADX-listed securities would improve the accessibility of Abu Dhabi’s equity markets to institutional investors globally.
“The innovation and assistance provided by ADX and our local partner Arqaam Capital were critical to the success of the project,” Boardman said.
Sumeet Akewar, Head of Electronic Trading at Arqaam Capital, said the launch reflected the company’s efforts to introduce trading technologies to the GCC.
“The launch of POSIT, beginning with ADX in partnership with Virtu, reflects our commitment to advancing the region’s electronic trading ecosystem and providing institutional investors with world-class trading solutions,” Akewar said.
Virtu’s POSIT platform is an electronic block-trading network serving institutional asset managers globally.