In order to shed further assets from the defunct rival it acquired this year, UBS Group AG is closing down the electronic trading platform it inherited from Credit Suisse.
According to persons with knowledge of the situation who asked not to be identified since the conversation was about a private matter, the bank intends to turn off Crossfinder, the alternative trading system, and AES, the connected algorithmic trading company, will stop routing orders to the system.
Those companies were previously at the vanguard of Wall Street’s electronic trading and innovation.
According to the folks, Crossfinder’s final day of ATS operations would be August 31 and after that day, AES won’t longer route orders to Crossfinder.
Following the bankruptcy of the bank, trading desks deleted the so-called dark pool from their routing tables, which caused Crossfinder ATS volume to decline by 70% in the four months leading up to May.
Dark pools are secret exchanges or trading platforms for securities where buyers and sellers can transact in secrecy and keep their orders hidden until they are carried out.
Due to the ability to hide their target price and prevent market movement, some investors choose to trade on these platforms.
Trading Electronically
After investing heavily in its prime-brokerage division in an effort to increase its share of the global equity market, Credit Suisse found it difficult to recoup from the approximately $5.5 billion in losses associated with Archegos. It has invested in stocks and computerized trading for many years.
According to its website, it offers a variety of algorithmic trading methods, tools, and analytics for international trading across equities, options, futures, and foreign exchange using its AES system, which was developed in the early 2000s.
A recent “Banking Tech Awards 2022” winners brochure stated that “AES has proven itself as a resilient trading platform during extreme market volatility in the 2008 financial crisis, the 2010 flash crash, and the onset of the Covid-19 pandemic in 2020.”
According to Bloomberg Intelligence analyst Jackson Gutenplan, Crossfinder was a significant ATS since its founding in 2005 and the third-largest as late as June 2022, but it is currently just over the median, with a 1.9% market share as of May.