Virtu Financial, Inc. · NYSE:VIRT
Virtu Financial — Presentation (June 2021)
10 slides from Virtu Financial's investor presentation, Jun 10, 2021
Slide 1: Measuring Real Execution Quality: Benefits to Retail Are Significantly Understated
Measuring Real Execution Quality Benefits to Retail Are Significantly Understated Douglas Cifu Chief Executive Officer Virtu Financial U.S. Securities and Exchange Commission Investor Advisory Committee June 10, 2021 © 2021 Virtu Financial. All rights reserved. Not to be reproduced or retransmitted
Slide 2: Benefits of Current Market Structure
Benefits of Current Market Structure The current US equities market structure provides meaningful and measurable benefits to retail investors 1 Virtu Americas 2020, see appendix for methodology and example; 2 Beyond the requirements of the Limit Order Display Rule; Significant Price and Size Improve
Slide 3: Real PI Provided by Virtu Is Over 3x Greater Than Measured by Rule 605
1 Virtu Americas 2020 activity; see appendix for methodology and example 2 All displayed quotes includes odd lots, NBBO, and depth of book from all lit exchanges 3 Includes Short Sell marked orders when not 201-restricted Real PI Provided by Virtu Is Over 3x Greater Than What Is Measured by Rule 605
Slide 4: Recommended Reforms
Rule 605 Recommended Reforms We advocate for changes that enhance execution quality metrics and disclosures to retail investors and encourage vigorous competition In an attempt to measure fill quality on marketable orders, Rule 605 reports compare the execution price of those orders to the NBBO pric
Slide 5: Reality: Separating Fact From Fiction
Reality Separating Fact From Fiction 1 See brokers’ Rule 606 Reports; 2 beyond the requirements of the Limit Order Display Rule; 3 See appendix for methodology and example; 4 See slide 7; 5 Citadel Securities, G1 Execution, Goldman Sachs, Jane Street, Two Sigma Securities, UBS Securities, Wolverine;
Slide 6: Wholesalers Are Part of a Broad Ecosystem
Wholesalers Are Part of a Broad Ecosystem Brokers leverage wholesalers for execution and order handling 1 Per Rule 605 Reports from wholesalers for 2020; 2 Extrapolating from Virtu’s activity, excludes marketable and non-marketable orders routed directly to exchanges by retail brokers Total Retail V
Slide 7: Strong Competition Benefits Retail
- 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 2013 2014 2015 2016 2017 2018 2019 2020 Strong Competition Benefits Retail 1 Net price improvement based on Rule 605 reports; 2 See appendix for methodology and example • Wholesalers compete against each other and over 40 other liquidity sources (exchanges,
Slide 8: Appendix
Appendix VIRTU G FINANCIAL
Slide 9: Benefits to Retail Are Significantly Understated (con't)
Benefits to Retail Are Significantly Understated (con’t) # Method Net Price Imp. (2020)1 Covered Order Sizes Benchmark Limitations / Notes 1 Current Rule 605 $953M 100 – 9999 Excl. Short Sell orders The price at the NBBO, assuming infinite size at the NBBO. • Doesn’t consider unprotected odd lots in
Slide 10: Consider the following scenario
Consider the following scenario Wholesaler receives a market order to sell long 600 shares. The aggregate size on the bid looks like the illustration below. Benchmark Calculation Wholesaler fills the sell order for 600 shares at $99.9700. Shares at each price level, by method Rule 605 605 + OL Quote