Charles River Brokerage, a subsidiary of order management system provider Charles River Development, has closed its dark pool.
According to the Boston-based company, it “has suspended execution on CReX, its anonymous block crossing venue, while pursuing a different method for building up liquidity.” The company provided no further details about this new method.
The alternative trading system, the Charles River Equity Crossing Network, or CReX, was registered with the Securities and Exchange Commission in 2007, and came to market in September 2010. The system was positioned to capture orders routed through Charles River’s order management system and trading infrastructure.
According to the brokerage’s Business Continuity Plan, updated in March, the firm suspended operations of CReX last December. In the BCP, the firm noted it would restart CReX once it conducted an “extensive liquidity analysis of Charles River Development’s buyside customers” and entered into a new clearing arrangement.
As a result of the change in strategy, Charles River Brokerage terminated its arrangement with its clearing firm and cut staff.
According to the company, the firm continues to operate as an introducing broker by integrating with and maintaining interfaces with a number of algorithmic brokers, ECN’s and other alternative trading systems. President Steve Schardin remains with the firm.
Those executives that left in December included Frank Matarese, director of brokerage operations; Michael Weston, a sales executive; and Jared Baker, also in sales and business development.
In a July 2011 interview with Traders Magazine, Matarese said that CReX had 50 users and that 25 employees were dedicated to the crossing system.
Before December, Charles River Brokerage operated three business lines. First, it acted as a soft dollar broker, accepting commissions to pay for its flagship OMS and other technology services. Second, it split commissions with other brokerages for trades done via its technology. Third, it operated the CReX system, executing institutional trades at the bid-ask midpoint.
According to the BCP, Charles River suspended its soft dollar business due to the termination of its clearing arrangement. It intended to restart that business once it enters into a new clearing arrangement, according to the BCP.
Charles River Brokerage, was founded in 2004, primarily as a soft dollar broker, used by money managers to pay for Charles River Development’s well-regarded order management system.
