Investment Management



The Impact of Equity Market Fragmentation and Dark Pools on Trading and Alpha Generation

Regulatory changes, ever-evolving trading technology and the use of commission sharing arrangements (CSAs) have caused secular changes in the dynamics of both buy-side and sell-side business models and approaches to trading. While institutional investors seek “best execution” for equity trades, these dynamics — which include fragmentation, a shift in daily liquidity distribution and changes in typical order size/frequency — are redefining the term.