Goldman Sachs Launches SIGMA X Australia
Goldman Sachs Electronic Trading (GSET) announced March 12 the expansion of its global crossing capabilities with the launch of its SIGMA XTM Australia alternative liquidity pool into the Australian market.
As an alternative liquidity pool, SIGMA X Australia connects a broad range of liquidity participants from offshore and domestic sources, including institutional long only investors, long-short funds as well as liquidity sourced from the global Goldman Sachs equity linked businesses.
Electronic crossing networks allow investors to match trades inside the consolidated national best bid/offer, while limiting adverse price impact due to order information leaking to market.
“The continued fragmentation of the Australian market, coupled with growth in low latency trading activity globally means that connecting investors with alternate sources of high quality liquidity will play an important role in the Australian market’s evolution,” said Shane Bolton, managing director and Co-Head of GSET Asia.
“We expect participation in alternative liquidity pools to continue to grow as a more challenging returns environment puts pressure on investors to be cost effective and avoid signaling risk.”
Deepan Pavendranathan, Head of Advanced Trading Services, Goldman Sachs Australia, said, “Goldman Sachs’ global experience in electronic crossing networks and our focus on maintaining a high quality pool of non-displayed liquidity means SIGMA X can deliver substantial value to clients. Our research indicates that by trading off-exchange SIGMA X can reduce market impact costs by up to 30%.”
SIGMA X Australia permits trading in all Australian Securities Exchange (ASX) listed stocks. No changes are required by Goldman Sachs clients in order to benefit from the crossing opportunities offered within the liquidity pool. The GSET algorithmic suite automatically interacts with the order flow available in SIGMA X.
The launch of SIGMA X Australia marks a significant milestone following the acquisition of the Australian and New Zealand business by The Goldman Sachs Group, Inc. in July 2011.