Virtu Financial Partners with Tokyo Stock Exchange to Enhance ETF Liquidity

Tuesday, 10/09/2024 | 16:10 GMT by Jared Kirui

The partnership aims to reduce transaction costs and improve operational workflows for institutional investors.

Tokyo Stock Exchange’s CONNEQTOR enables investors to request simultaneous quotes from multiple market makers.

Virtu Financial has launched a direct connection between its execution management system and the Tokyo Stock Exchange. This integration aims to streamline large-scale ETF transactions and give traders a better access to real-time liquidity and execution capabilities.

Execution Management Expansion

According to the official announcement today (Tuesday), Virtu Financial has successfully integrated its Triton Valor EMS with the Tokyo Stock Exchange’s CONNEQTOR platform. This development will utilize CONNEQTOR’s advanced request-for-quote (RFQ) system. It is reportedly a response to increasing client requests for better access to liquidity sources and efficient trading mechanisms.

CONNEQTOR, which was launched in February 2021, has become a key platform for ETF trading in Japan. Designed to facilitate large transactions that are challenging to execute in traditional auction sessions, the platform allows investors to request simultaneous quotes from multiple market makers globally.

As of July 2024, the platform has achieved a record monthly trading value of 295.5 billion JPY, highlighting its growing influence in the market. The connectivity between Triton Valor and CONNEQTOR allows institutional investors to access real-time ETF liquidity, reducing transaction costs and improving operational workflows.

The Tokyo Stock Exchange, a subsidiary of Japan Exchange Group (JPX), has recorded growth in trading volumes and liquidity. The platform’s average daily trading volume stands at more than 5 trillion JPY. The addition of Triton Valor’s connectivity is expected to further bolster the exchange’s role in the global financial markets.

Virtu's Financial Performance

In July, Virtu Financial posted strong second-quarter results with substantial gains across key financial metrics. The firm reported highlighted earnings growth, debt refinancing, dividend payouts, and share buybacks during this period. Revenue jumped 36% to $693 million.

Virtu's net trading income increased 39% year-over-year to $426.4 million from $306.2 million. The net income for the period reached $128.1 million, a substantial growth from $29.5 million in Q2 2023. The firm's basic and diluted earnings per share increased to $0.71, up from $0.16 in the previous year. On an adjusted basis, the EPS was $0.83, marking a 124% increase.

Meanwhile, Virtu Financial disclosed in June that it was seeking $500 million in debt financing to restructure an initial debt. According to the firm, the senior first lien notes aim to optimize Virtu Financial's financial position by repaying existing debt. Additionally, Virtu announced an initiative to significantly amend its existing credit arrangement.