As a leading provider of liquidity and white label trading solutions, CMC Markets Institutional has been developing its own role as a non-bank liquidity provider (NBLP) in recent years. Significant internal flows combined with the ability to connect with a select group of prime brokers and other pricing sources means that the company can be a true liquidity maker. This white paper gave the opportunity to look in greater detail at market perceptions of NBLPs
A series of key findings were observed, including how NBLPs can help reduce latency and how such innovation has had a positive impact across the market. The report also highlighted dhow digitization has clouded the picture even if the most efficient non-bank participants in this space can still add value, but ultimately that retail flow ‘adds up’, with these institutions acting as genuine proxy wholesalers of liquidity.
The paper concludes that the liquidity market remains ripe for further disruption. Some traditionalists may be happy with the status quo, but questions remain as to whether that cohort fully understands the benefits that can be offered. It is also clear that others are ready to adopt change and want to see even more innovation. Further evolution in how liquidity is constructed seems inevitable.
Read the full white-paper here.