After doubling its average daily volume of shares trading in the past six months on its NYFIX Millennium Dark Pool, NYFIX is working to increase liquidity in the undisplayed matching pool even more in the coming months. With new tools and added functionality, Howard Edelstein, CEO of NYFIX, says that NYFIX Millennium is working to broaden its reach.

Edelstein joined the company in September of last year as part of Warburg Pincus’ $75 million private equity investment in NYFIX. As CEO, Edelstein has been making some strategic additions to the company and has been working to build out his management team.

“We have some pretty ambitious growth objectives,” says Edelstein. “2007 was a sort of transition year for us and now you'll see one seamless team by the year end and new products start to hit the market. By the end of the year we'll also start to see significant revenue growth.” He points out that NYFIX Millennium reached a record 68 million shares matched in the system in a single day and the numbers continue to climb.

To accomplish this, Edelstein says NYFIX Millennium will be adding new asset classes, as well as new geographies. In Europe he says NYFIX is already actively looking to partner with or acquire complementary offerings in order to take advantage of MiFID changes and launch similar offerings for undisplayed crossing in equities and other products.

“We recognize the importance of having global assets on the ground,” says Edelstein. “We're actively looking for people we can partner with who have corresponding skill sets, but maybe don't have the technology or the community that we have and see the real value partnering up with us and taking advantage of our deep experience in this market.”

First up will most likely be fixed income, but Edelstein says his team is also exploring Foreign Exchange. He says that potential partners will come in the form of middle-sized companies that have a strong presence in the region.

In addition, NYFIX Millennium will be adding a new “alerting” functionality to enable trades to be held for a certain amount of time, instead of passing directly through and potentially missing a match by milliseconds. The system will message or alert with passive liquidity providers when a potential match is briefly sitting in the pool to increase the chances of getting a trade match.

Edelstein emphasizes this type of functionality as an important differentiator for NYFIX Millennium — the trader’s ability to choose whether or not they want the trade to sit for a certain period of time or just pass through.

“It's a new feature, where you can send out messages to the passive liquidity providers and allow them to immediately access liquidity in the pool if they so choose,” says Brennan Carley, executive vice president, head of product operations and chief strategy officer at NYFIX. Carley also recently came on board as part of NYFIX's strategic changes for building up its liquidity and offerings.

He adds, “This is all part of the overall strategy on Millennium's part to de-fragment the fragmented market. One of the big problems traders have is there are all these pools sitting out there all over the place and it's getting more and more difficult to access them. We are looking to come up with ways to reduce that fragmentation and allow Millennium to become a sort of pool of pools.”

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