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CEO CHAT: Luminex’s Clark Discusses the Buy-Side and Regulation
Traders Magazine Online News, October 30, 2017
Operating an ATS in today’s market structure is a challenging proposition amid the changing market regulatory environment. Jonathan Clark, Chief Executive Officer of ATS Luminex, recently sat down with Traders Magazine’s editor John D’Antona and discussed several topics ranging from what the buy-side wants to order protection to the regulatory landscape.
Traders Magazine: What are the most important issues facing the buy side? What do they want? Liquidity? Transparency? Protection from predatory trading? How important is block trading?
Jonathan Clark: They want liquidity, but in a safe environment. Blocks are imperative to large institutional traders who need to buy and sell large amounts of stock; it’s even more important to trade those positions with minimal impact and information leakage.
Not coincidentally, these are the concerns that Luminex was set up to address. With block trading being so important to the buy side, we think Luminex is one of if not the best places to meet that need. As of August 2017, the most recent month for which there is data available, Luminex is now the leading ATS by average trade size in all three block trading categories that FINRA tracks.
Now, I also realize many of our clients want to rest their orders in many places at once, and that’s fine. But we say if that’s the case, try to incorporate Luminex into your workflow. When you get a hit at Luminex, you know it’s 100% buy side natural liquidity.
Traders Magazine: Is the buyside happier/more comfortable trading amongst itself, with no brokers?
Clark: Everything we see and hear suggests they are thrilled with the experience they are receiving at Luminex, where the buy side is only trading with itself. The reaction we hear is excitement. Now, why are they happy with it? They’re happy because they know their execution was clean and safe, and they just saved their clients a lot of money.
That’s because not only does Luminex help our subscribers achieve best execution for their shareholders and investors by executing large block trades with minimal market impact, we also offer what I believe is the lowest commission rate of any block execution platform out there. And to your point, there are no brokers involved in trading at Luminex. Luminex doesn’t have a trading desk or a prop desk. We don’t make markets or have brokers or traders. Our clients know that Luminex doesn’t have the potential conflicts that some venues have, which makes them more comfortable trading at Luminex.
Traders Magazine: And the safety comes from it being the buy side only?
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