What Is Instinet?

Instinet is a♈ global financial securities service that operates an electronic securities order matching, tꦐrading, and information system which allows members, primarily institutional traders, and investors, to display bids and offer quotes for stocks, and conduct transactions with each other.

Instinet is an example of a dark pool of liquidity, a private exchange for trading securities that is not accessible by the investing public. The name implies a lack of 澳洲幸运5官方开奖结果体彩网:transparency. and it facilitates 澳洲幸运5官方开奖结果体彩网:block trading by i🎃nstitutional investors who do no💎t wish to impact the markets with their large orders.

According to the SEC, there were 74 registered Alternative Trading Systems, or dark pools, as of February 2024.

Understanding Instinet

Instinet is an institutional, agency-only broker that also serves as the independent equity trading arm of its parent, Nomura Group. It executes trades for 澳洲幸运5官方开奖结果体彩网:asset management firms, hedge funds, insurance companies, m🔜utual funds, and pension funds.

Headquartered in New York, the company offers investment market insights, full-service trading desks, advanced algorithmic trading strategies, access to unique and specialized liquidity, and workflow solutions to help clients efficiently manage their investment process.

Instinet is best known as one of the first off-exchange trading alternatives, with its “green screen” terminals prevalent in the 1980s and 1990s, and as the founder of Chi-X Europe and Chi-X Global.

Who Founded Instinet?

Instinet was founded by Jerome M. Pustilnik and Herbert R. Behrens and was incorporated in 1967 as Institutional Networks Corp. Aiming to compete with the New York Stock Exchange, Instinet established computer links between major institutions, such as banks, mutual funds, and insurance companies, with no delays or intervening specialists.

Instinet is Wall Street's oldest 澳洲幸运5官方开奖结果体彩网:electronic communications network, or ECN, and after it was acquired by Reuters Group in 1987, it and other electronic communications networks evolved into major threats to the established stock exchanges.

Reuters acquired Island ECN in 2002, merging it with Instinet, and thereby expanding its electronic communications network and its brokerage business. In 2003, Reutuers changed Island ECN's name to Inet ECN in 2003. Nasdaq then acquired Inet ECN in 2005, and Instinet was sold to a 澳洲幸运5官方开奖结果体彩网:private equity firm.

What Is Nomura?

In February 2007, Nomura purchased Instinet from private equity firm Silver Lake for a reported $1.2 billion. Nomura is a global financial services group with an integrated network spanning over 30 countries and regions. As of 2024, Instinet is operated as an independent subsidiary of Nomura and is headed by CEO Ricard Parsons.

Instinet credits itself with creating the term "fintech," or financial technology in 1969 before the term was coined. Expanding in 2022, Instinet and Nomura acquired FIS Execution Services to obtain its algorithmic trading technology and intellectual property to help clients improve execution quality, minimize information leakage, and decrease execution costs.

The Bottom Line

Instinet allows for financial professionals, usually institutions, to privately trade amongst each other without the public having access. Financial institutions, such as hedge funds, buy and sell large quantities ♔of stocks, which could greatly influence the price of the stock they a🌊re trading. To avoid this, financial institutions look to trade privately via services like Instinet.