Instinet Europe Releases Results of MiFID Best Execution Policy Review for August – October 2008 and Full 12 Months Since Introduction of MiFID

10 December 2008

Instinet Incorporated, a global leader in electronic trading and agency-only brokerage services, today announced that its European agency brokerage subsidiary, Instinet Europe, has published the key findings of its Best Execution Policy Review, conducted in accordance with MiFID regulations. The review covers Instinet Europe’s trading performance from 1 August 2008 through to 31 October 2008 (months 10-12 of MiFID).

The key findings are as follows:
• Instinet Europe’s SmartRouter™ has been enhanced to interact with new trading venues as they have been introduced. The average price improvement* when trading on new venues was 6.06 bps for the three month measurement period, rising to 6.58 bps in October 2008, compared to an initial 1.73 bps in November 2007 (the first month of MiFID) and the previous quarter’s (May-July 2008) average of 5.32 bps.
• Of the shares traded away from the primary markets on alternative trading venues, Instinet Europe’s clients received price improvement 55.4 percent of the time (by value traded) and executed at the same price or better than found on the primary markets 96.2 percent of the time over the three months.
• By value traded, Instinet Europe executions away from the primary markets for UK, French, German and Dutch equities increased to 39.7 percent in October 2008, compared to an initial 11.3 percent in November 2007. For UK equities alone, in October 2008 Instinet Europe executed 45.2 percent of its volume away from the London Stock Exchange, compared to 14.0 percent in November 2007.
• Between August and October 2008, Instinet Europe connected to and began successfully trading on both NASDAQ OMX Europe, launched at the end of September, and BATS Europe, launched at the end of October. Additionally, Instinet Europe expects to continue to link to other new liquidity pools as they become available, including NYSE Arca Europe and NYSE Euronext’s SmartPool.
• Instinet Europe’s SmartRouter now has access to the following MTFs: BATS Europe, BlockMatch®, Chi-X® Europe, NASDAQ OMX Europe, NYFIX Euro Millennium™ and Turquoise. Instinet also continues to connect to a number of broker dark pools.

Commenting on the findings of the Best Execution Review, Richard Balarkas, CEO of Instinet Europe said, “We believe that both the new and emerging pools of liquidity offer tremendous opportunities for price improvement. We reported average savings of 6.06 bps for our clients during this review period in large part by delivering on our promise to link our clients to each and every liquidity pool to which we are allowed access, and this rose to 6.58 bps in October 2008 from an initial 1.73 bps back in November 2007. Over the 12 months since MiFID was introduced, this approach has allowed Instinet to pass on the full benefit of price improvement when trading on the new execution venues. This in turn has given our clients significant savings, averaging 4.91 bps, when removing liquidity from MTFs.”

He continued: “As an agency-only broker, our sole aim is to hunt out the best possible execution opportunities for our clients with the continual refinement of our sophisticated smart order router and commitment to connect to new liquidity venues. Next year is going to prove interesting, as we anticipate more new entrants and the quest for liquidity between the MTFs themselves is only set to heighten. Whatever the outcome, we are confident that our smart order router will continue to seek out the best possible executions for our clients.”

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