Virtu Financial, Inc. operates as a financial company that leverages technology to deliver liquidity to the global markets and innovative, transparent trading solutions to its clients.
Leveraging the company’s global market structure expertise and scaled, multi-asset infrastructure, the company provides its clients with a robust product suite, including offerings in execution, liquidity sourcing, analytics, and broker-neutral, multi-dealer platforms in workflow technology. The company’s product...
Virtu Financial, Inc. operates as a financial company that leverages technology to deliver liquidity to the global markets and innovative, transparent trading solutions to its clients.
Leveraging the company’s global market structure expertise and scaled, multi-asset infrastructure, the company provides its clients with a robust product suite, including offerings in execution, liquidity sourcing, analytics, and broker-neutral, multi-dealer platforms in workflow technology. The company’s product offerings allow its clients to trade on hundreds of venues across over 50 countries and in multiple asset classes, including global equities, Exchange Traded Funds (‘ETFs’), options, foreign exchange, futures, fixed income, cryptocurrencies, and myriad other commodities. The company’s integrated, multi-asset analytics platform provides a range of pre- and post-trade services, data products, and compliance tools that its clients rely upon to invest, trade, and manage risk across global markets.
The company has developed a proprietary, multi-asset, multi-currency technology platform that is reliable, scalable, and modular, and it integrates directly with exchanges, liquidity centers, and its clients. The company’s market data, order routing, transaction processing, risk management, and market surveillance technology modules manage its market making and institutional agency activities in an efficient manner that enables it to scale its activities globally, across additional securities and other financial instruments and asset classes, without significant incremental costs or third-party licensing or processing fees.
The company’s execution services and client solutions products are designed to be transparent. It uses the latest technology to create and deliver liquidity to global markets and innovative trading solutions and analytics tools to its clients. The company interacts directly with hundreds of retail brokers, Registered Investment Advisors, private client networks, sell-side brokers, and buy-side institutions.
The company primarily conducts its Americas equities business through its SEC registered broker-dealer, Virtu Americas, LLC (‘VAL’). It is registered with the Central Bank of Ireland (‘CBI’) and the Financial Conduct Authority (‘FCA’) in the UK for its European trading, the Canadian Investment Regulatory Organization (‘CIRO’) and the Ontario Securities Commission for its Canadian trading, and the Monetary Authority of Singapore (‘MAS’), Securities and Futures Commission of Hong Kong (‘SFC’), and Australian Securities and Investments Commission (‘ASIC’) for its Asia-Pacific (‘APAC’) trading. The company is registered as a market maker or liquidity provider and/or enters into direct obligations to provide liquidity on nearly every exchange or venue that offers such programs. It engages regularly with regulators around the world on issues affecting electronic trading and other matters. In the U.S., the company conducts its business from its headquarters in New York City and its offices in Boston, Austin, Texas, Chicago, Short Hills, New Jersey, Rye Brook, New York, and Palm Beach Gardens, Florida. Abroad, it conducts its business through trading centers located in London, Dublin, Paris, Singapore, Hong Kong, Toronto, and Sydney.
Business Segments
The company has two operating segments: Market Making and Execution Services.
Market Making
The company’s Market Making segment principally consists of market making in the cash, futures, and options markets across global equities, fixed income, currencies, cryptocurrencies, and commodities. The scale and diversity of the company’s market making activities provide added liquidity and transparency to the financial markets. It supports transparent and efficient, technologically advanced marketplaces, and advocates for legislation and regulation that promotes fair and transparent access to the financial markets.
As a market maker, the company commits capital on a principal basis by offering to buy securities from, or sell securities to, broker dealers, banks, and institutions. It engages in principal trading in the Market Making segment direct to clients, as well as on exchanges, ATSs, and other market centers. As a complement to electronic market making, the company’s cash trading business handles specialized orders and transacts on the OTC Link ATS operated by OTC Markets Group Inc.
The company makes markets in a number of different asset classes. It registers as market makers and liquidity providers where available and supports affirmative market making obligations.
The company provides competitive and deep liquidity that helps to create more efficient markets around the world. It stands ready, at any time, to buy or sell a broad range of securities and other financial instruments, and it generates revenue by buying and selling volumes of securities and other financial instruments while earning small bid/ask spreads.
Technology is at the core of the company’s business. The company’s team of in-house software engineers develops its software and applications, and it utilizes optimized infrastructure to integrate directly with the exchanges and other trading venues on which it provides liquidity. The company’s focus on technology and its ability to leverage its technology enable it to be one of the lowest cost providers of liquidity to the global electronic trading marketplace.
The company has built and continuously refines its automated and integrated, real-time systems for global trading, risk management, clearing, and cash management, among other purposes. It has also assembled a proprietary connectivity network between it and exchanges around the world. Efficiency and speed in performing prescribed functions are always crucial requirements for the company’s systems, and generally, it focuses on opportunities in markets that are sufficiently advanced to allow the seamless deployment of its automated strategies, risk management system, and core technology.
The company’s core operations team across its offices in North America, APAC, and Europe monitors its systems 24 hours a day, five days a week. This function provides coverage for the company’s full technology platform, including its market data, order routing, transaction processing, and risk management technology modules.
Clients and Products
The company offers direct-to-client market making services across multiple asset classes primarily to sell-side clients, including global, national, and regional broker dealers and banks, as well as buy-side clients comprising, among others, mutual funds, pension plans, plan sponsors, hedge funds, trusts, and endowments in North America, Europe, and Asia.
Global Equities
The company trades over 25,000 listed and over-the-counter (‘OTC’) securities, including, among others, equity-related futures and exchange-traded products (‘ETPs’), on various U.S. Securities and Exchange Commission (‘SEC’) registered exchanges and other market centers around the world, including the New York Stock Exchange (‘NYSE’), the Nasdaq, NYSE Arca, Cboe BATS, Chicago Stock Exchange, the Members Exchange (‘MEMX’), the TSX in Canada, Bovespa in Brazil, and BMV in Mexico, as well as other ATSs and more than 20 private liquidity pools.
The company’s strategy globally is to utilize high-speed, efficient connections to all of the registered exchanges and market centers, including the London Stock Exchange, Cboe Europe Equities, Euronext, Six Swiss Exchange, Australian Securities Exchange, Tokyo Stock Exchange, and Singapore Exchange, as well as other trading venues and additional pools of liquidity.
As ETPs and other similar products, including Exchange Traded Funds (‘ETFs’), have proliferated both domestically and internationally, demand has increased for trading the underlying assets or hedging such products. The company’s technology has enabled it to expand into providing liquidity to this growing area by making markets across these assets in a variety of trading venues globally.
Global Fixed Income, Currencies, and Commodities (‘FICC’), Options, and Other
The company’s Fixed Income market making includes its activity in U.S. Treasury securities and other sovereign debt, corporate bonds, and other debt instruments. It trades these products on a variety of specialized exchanges, direct to counterparties, and other trading venues, including BrokerTec, eSpeed, DealerWeb, Bloomberg, Tradeweb, MarketAxess, and BGC’s Fenics UST.
The company’s Currencies market making, including spot, futures, and forwards, comprises its activity in over 80 currency pairs, including deliverable, non-deliverable, fiat, and digital currencies, across dozens of venues and direct to counterparties. It is a participant in the major foreign exchange venues, including LSEG, Currenex, Cboe FX, and CME.
The company’s Commodities market making takes place on the CME, ICE, and Nasdaq Futures in crude oil, natural gas, heating oil, and gasoline futures. It trades approximately 100 energy products and futures on the ICE, CME, and TOCOM. The company also actively trades precious metals, including gold, silver, platinum, and palladium, as well as base metals, such as aluminum and copper.
The company’s Options and Other market making includes its activity on all of the U.S. options exchanges of which it is a member (i.e., Cboe, ISE, and NYSE Arca) and on the U.S. futures exchanges, as well as its activity in cryptocurrencies. The company’s cryptocurrency market making includes spot, perpetuals, futures, and ETFs and takes place across over 55 venues and exchanges.
Execution Services
The company offers agency execution services and trading venues that provide transparent trading in global equities, ETFs, fixed income, currencies, and commodities to institutions, banks, and broker dealers. It generally earns commissions when transacting as an agent for its clients. Within the Execution Services segment, the company offers the following categories of products and services:
Agency-based, execution-only trading, done through a variety of access points, including algorithmic trading and order routing; institutional sales traders who offer portfolio trading and single stock sales trading providing execution expertise for program, block, and riskless principal trades in global equities and ETFs; and matching of client conditional orders via POSIT Alert and in its ATSs, including Virtu MatchIt and POSIT.
Workflow Technology, and the company’s integrated, broker-neutral trading tools delivered across the globe, including order and execution management systems and order management software applications and network connectivity; and
Trading Analytics, including tools enabling portfolio managers and traders to improve pre-trade and real-time execution performance and post-trade analysis; portfolio construction and optimization decisions; and securities valuation.
Clients and Products
The company offers agency execution services across multiple asset classes to buy-side clients, including mutual funds, pension plans, plan sponsors, hedge funds, trusts, and endowments, and sell-side clients, including global, national, and regional broker dealers and banks in North America, Europe, and Asia. In 2024, the company’s Execution Services segment did not have any client that accounted for more than 10% of its total commissions earned.
The company’s ATSs provide clients with important sources of non-displayed liquidity. It also offers clients voice access to global markets, including sales and trading for equities, ETFs, and options. Certain broker-dealer affiliates also engage in foreign exchange trading to facilitate equity trades by clients in different currencies, as well as other client foreign exchange trades unrelated to equity trades. The company handles complex trades, accessing liquidity from its order flow and other sources. It provides soft dollar and commission recapture programs.
The company also provides algorithmic trading and order routing that combine technology, access to its differentiated liquidity, and support from experienced professionals to help clients execute trades. The segment also includes the results of the company’s capital markets business, in which it acts as an agent for issuers in connection with at-the-market offerings and buyback programs.
Agency-based, Execution-only Trading
The company’s algorithms and order routers help portfolio managers and traders to trade orders quickly, comprehensively, and cost-efficiently from its EMS or its Order Management System (‘OMS’) and most third-party trading platforms. The company’s institutional sales traders offer portfolio trading and single stock sales trading, which provides execution expertise for program, block, and riskless principal trades in global equities and ETFs.
The company provides matching of client orders in its ATSs, including Virtu MatchIt, POSIT ATS, and POSIT MTF. MatchIt provides two crossing sessions, a Main Session and a Conditional Session. The Main Session provides continuous crossing with price/time priority and is available to the company’s subsidiaries and external subscribers. The Conditional Session accepts conditional orders with price/size priority, and is only available to the company’s subsidiaries. POSIT provides continuous crossing of non-displayed (or dark) equity orders and price improvement opportunities within the published best bid and offer price. In the U.S., POSIT Alert is a block crossing mechanism within POSIT ATS. POSIT Alert unites liquidity sourced directly from trader OMSs with conditional orders from electronic participants for matching using a conditional order process. In addition, POSIT MTF Auction provides frequent batch auctions, which display indicative size/price prior to trade execution.
Workflow Technology
The company’s workflow technology tools are designed to meet the needs of a broad range of trading styles. As an example, Triton Valor, the most recent release of the company’s multi-asset and broker-neutral Triton EMS, helps to bring integrated execution and analytical tools to the user’s desktop, including the Algo Wheel, an algorithmic way for a portfolio manager to intelligently allocate volume between different providers. Triton supports global list-based and single-stock trading, as well as futures and options capabilities, and includes ITG Net, a fully integrated and supported financial services communications network. Triton also provides traders with access to scalable, low-latency, multi-asset trading opportunities. The company’s OMS combines portfolio management, compliance functionality, and a fully integrated and supported financial services communications network (ITG Net) with a consolidated, outsourced service for global trade matching and settlement that provides connectivity to the industry’s post-trade utilities, as well as support for multiple, flexible settlement communication methods and a real-time process monitor.
ITG Net is the company’s global financial communications network that provides reliable and fully-supported connectivity between buy-side and sell-side firms for multi-asset order routing and indication-of-interest messages with Virtu and third-party trading platforms. ITG Net supports approximately 9,000 global billable connections to more than 600 unique execution destinations worldwide. ITG Net also integrates the trading products of third-party brokers and ATSs into the company’s OMS and EMS platforms.
RFQ-hub, a multi-asset platform for global listed and over-the-counter (‘OTC’) financial instruments, connects buy-side trading desks and portfolio managers with a network of sell-side market makers in Europe, North America, and the APAC region, allowing these trading desks to place requests-for-quotes (‘RFQ’) in negotiated equities, futures, options, swaps, convertible bonds, structured products, and commodities. RFQ-hub is available as a stand-alone platform. The company had formed a consortium of strategic partners and investors to own and support the growth of the RFQ-hub business. Through a series of related transactions, the company sold a substantial minority interest in the business to multiple strategic partners and has maintained a majority ownership interest. In April 2024, the company entered into a Unit Purchase Agreement to sell a 49% interest in RFQ-hub, and subject to the satisfaction of certain closing conditions, including the receipt of specified regulatory approvals.
The company offers administration and consolidation of client commission arrangements across a wide range of its clients’ preferred brokerage and research providers through Commission Manager, a robust, multi-asset, web-based commission management portal, and Budget Tracker, which enables asset managers to set research allocations and create and track budgets for their end clients. The company also offers a comprehensive research payment account solution, enabling clients to unbundle research and execution payments to comply with the European Markets in Financial Instruments Directive (‘MiFID’) II regulations.
Analytics
The company’s trading analytics suite helps enable portfolio managers and traders to analyze execution performance before the trade happens (pre-trade) and during trading (real-time) by providing trading analytics and risk models that help them perform predictive analysis, manage risk, change strategy, and reduce trading costs. Trading costs are affected by multiple factors, such as execution strategies, time horizon, volatility, spread, volume, and order size. The company’s trading analytics suite is designed to gauge the effects of these factors and aid in the understanding of the trade-off between market impact and opportunity cost. For example, the company’s transaction cost analysis (‘TCA’) offers measurement and reporting capabilities to analyze costs and performance across the trading continuum. TCA assesses trading performance and implicit costs under various market conditions. TCA is also available for foreign exchange transactions (FX TCA) and for corporate and sovereign bond trading (FI TCA).
Regulation
The company conducts its U.S. equities and options market making and provides execution services through VAL, its SEC-registered broker-dealer. VAL is regulated by the SEC, and its designated examining authority is the Financial Industry Regulatory Authority, Inc. (‘FINRA’). VAL is also registered as a floor trader firm with the Commodity Futures Trading Commission (‘CFTC’).
The company is a full clearing member of the National Securities Clearing Corporation (‘NSCC’) and the Depository Trust & Clearing Corporation (‘DTCC’). Its activities in U.S. equities are both self-cleared and rely on fully-disclosed clearing arrangements with third-party clearing firms. The company uses the services of prime brokers, primarily in other asset classes, who provide it direct market access to markets and often cross-margining and margin financing in return for execution and clearing fees. It continually monitors the credit quality of its prime brokers and relies on multinational banks for most of its execution and clearing needs globally.
The company’s energy, commodities, and currency market making and trading activities are primarily conducted through Virtu Financial Global Markets LLC.
The company conducts its European, Middle Eastern, and African (‘EMEA’) market making activities from Dublin and through its subsidiary Virtu Financial Ireland Limited (‘VFIL’), which is authorized as an ‘Investment Firm’ with the CBI. It conducts its EMEA execution services trading activity from Dublin, London, and Paris through its subsidiary Virtu Europe Trading Limited (‘VETL’) (f/k/a Virtu ITG Europe Limited). VETL is authorized and regulated by the CBI as an ‘Investment Firm’ and maintains branch offices in London and Paris. The London branch office of VETL is authorized and regulated by the FCA. VETL’s Paris branch is registered with the Banque de France. VETL also operates a multi-lateral trading facility (‘MTF’) in Ireland, and Virtu ITG UK Limited (‘VIUK’), a U.K. investment firm, operates a MTF in the U.K. VIUK is an investment firm that is authorized and regulated by the FCA.
The company conducts its APAC market making activities, including much of its market making in cryptocurrency products from Singapore and through its Singapore subsidiary, Virtu Financial Singapore Pte. Ltd. Virtu Financial Singapore Pte. Ltd. is registered with the MAS for an investment incentive arrangement and licensed by the MAS to deal in certain capital markets instruments. The company conducts its APAC execution services trading activities from Singapore, Hong Kong, and Australia through its subsidiaries Virtu ITG Singapore Pte. Limited, Virtu ITG Hong Kong Limited, and Virtu ITG Australia Limited. Virtu ITG Singapore Pte. Limited is a holder of a Capital Markets Services License from the MAS, which is its principal regulator. Virtu ITG Hong Kong Limited is a participating organization of the Hong Kong Stock Exchange and a holder of a securities dealer’s license issued by the SFC, which is its principal regulator. Virtu ITG Australia Limited is a market participant of the Australian Securities Exchange (‘ASX’) and Chi-X Australia Limited, and is also a holder of an Australian Financial Services License issued by the ASIC, which is its principal regulator.
The company’s Canadian market making activities and its Canadian execution services trading activities are conducted through its subsidiary Virtu Canada Corp (f/k/a Virtu ITG Canada Corp.). Virtu Canada Corp. is a Canadian broker-dealer registered as an investment dealer with CIRO, Ontario Securities Commission (‘OSC’), the Autorité Des Marchés Financiers in Quebec, Alberta Securities Commission (‘ASC’), British Columbia Securities Commission, Manitoba Securities Commission, New Brunswick Securities Commission, Nova Scotia Securities Commission, and Saskatchewan Financial Services Commission. Virtu Canada Corp. is also registered as a Futures Commission Merchant in Ontario and Manitoba, and a Derivatives Dealer in Quebec.
Most aspects of the company’s business are subject to regulation under federal, state, and foreign laws and regulations, as well as the rules of the various self-regulatory organizations (‘SROs’) of which its broker-dealer subsidiaries are members. The SEC, FINRA, CFTC, NFA, U.S. state securities regulators, the European Securities and Markets Authority (‘ESMA’) in the European Union, the CBI in Ireland, FCA in the U.K., Banque de France in France, MAS in Singapore, SFC in Hong Kong, ASIC in Australia, CIRO, and OSC in Canada, as well as other SROs and other U.S. and foreign governmental regulatory bodies, promulgate numerous rules and regulations. As a matter of public policy, regulatory bodies are charged with safeguarding the integrity of the securities and other financial markets and with protecting the interests of investors in those markets, including, but not limited to, trading practices, order handling, best execution practices, anti-money laundering and financial crimes, handling of material non-public information, safeguarding data, compliance with exchange and clearinghouse rules, capital adequacy, customer protection, reporting, record retention, market access, and the conduct of officers, employees, and other associated persons. From time to time, the company is the subject of requests for information and documents from the SEC, FINRA, and other regulators.
Certain of the company’s subsidiaries are subject to regulatory capital rules of the SEC, FINRA, other SROs, and foreign regulators.
History
Virtu Financial, Inc. was founded in 2008.
