New York Block Exchange Closing
February 8, 2013
BIDS Trading and NYSE Euronext are closing the New York Block Exchange at the end of this month.
The venue, known as NYBX, allowed dark orders from the BIDS alternative trading system to interact anonymously with displayed and reserve liquidity at the New York Stock Exchange. Both buyside and sellside firms were allowed into the system, which allowed participants to place bids outside the national best bid and offer for a security.
But the venue, launched in January 2009, did not find great demand. The venue only achieved about 2 million shares of trading a day, according to BIDS chief executive Tim Mahoney.
“People didn’t see a need to trade outside the spread,’’ Mahoney said. “There’s no reason to have another venue out there, if there’s not demand there.’’
BIDS will concentrate its efforts on its primary venue, the BIDS ATS, which matches trades at the midpoint of the national best bid and offer.
That dark pool had a record year in 2012, Mahoney said, with average daily volume of 73 million shares, counting each side of a transaction, known as double-counting.
The NYBX volume is “single-counted,’’ meaning matches only count once.
The block exchange continuously searches the New York Stock Exchange order book, to find displayed, reserve and hidden interest that it can match with dark orders from the BIDS ATS, while keeping order details anonymous.
NYBX has been open to all New York Stock Exchange members and BIDS subscribers, who use sponsored access.
“We valued our collaboration on NYBX, and are very pleased with BIDS success in making block trading more efficient,'' said NYSE Euronext chief operating officer Larry Leibowitz.
NYSE Euronext will remain an investor in the company and "continue to work with BIDS to explore opportunities that address client needs,” he said.
NYBX will cease operating on February 28.
In a fiing with the SEC, the exchange cited a “lack of customer interest’’ for its closure.