Instinet Builds Upon Quantitative Strategy Offerings 

Anna Lyudvig

Instinet, the wholly-owned execution services arm of Nomura Group, has agreed to acquire FIS Execution Services, the algorithmic trading services business of FIS, including its algo trading technology and intellectual property.

Pending regulatory approvals, the deal is expected to close later this year.

Founded in 2000, FIS Execution Services is an agency-focused broker based in Geneva, IL.

Formerly known as Fox River, the business provides customized algorithms that can help to improve client execution quality, minimize information leakage and decrease execution costs. 

Ralston Roberts

“We’re expanding our opportunities to help clients achieve better execution, and further building upon our quantitative strategy offerings,” Ralston Roberts, Global CEO of Instinet, told Traders Magazine.

“The FIS Execution/Fox River team is known for building highly customizable strategies by quants, for quants,” he added.

FIS acquired the business through its 2015 acquisition of SunGard for $9.1bn in cash and stock.

FIS Execution Services provides buy- and sell-side firms a suite of execution solutions. 

Key products offered include trading algorithms and execution services, including Direct Market Access and Sales Trading.

The range of algorithms includes a percent of volume strategy that controls execution pace, as well as volume-specific strategies targeting best execution. 

Following the acquisition, Instinet will offer employment to the FIS Execution Services staff.

Roberts said there is tremendous alignment between Instinet’s and FIS Execution Services’s mission: “We both are intensely focused on our clients’ execution performance quality”. 

He added that both firms use quantitative research and advanced technology to drive efficiencies and lower trading costs. 

“This will be a joining of complementary platforms, and it promises to be a great fit culturally, as well as strategically,” he said. 

“We look forward to providing the benefits of this combination to our collective clients,” he added.

According to Roberts, this acquisition will further enhance Instinet’s “market leading suite of electronic and quantitative trading strategies and tools”, and drive new business, particularly from quantitatively-driven clients. 

“Our new FIS Execution Services/Fox River teammates have deep relationships with top firms in that space, we look forward to integrating them into our family, and their algo technology will be a terrific addition to the platform,” he commented.

Roberts said that FIS Execution Services/Fox River clients will have access to Instinet’s broader suite of products and services surrounding the trade lifecycle, and their global reach – plus a more streamlined access to the full capabilities of Nomura.

“Over time, we may expand the suite’s capabilities to other markets and lever the ingenious technology for the benefit of our entire platform,” he said.

“We’re always evaluating our business and the evolving needs of our clients, and analyzing not only other opportunities for growth, but also how the competitive landscape changes,” he concluded.