Dr Ralf Donner

Goldman Sachs launches Franchise Matching algo

June 2023 in Top Stories

Goldman Sachs has rolled out a Franchise Matching algo to clients, which offers a new way of using bank internalisation to offset risk. The algo has been developed to send part of the parent order to a new venue, which triggers an e-book skew to make it more attractive to clients on the opposing side in order to fill the algo. Ralf Donner, Head of Marquee Execution Solutions at Goldman Sachs, says that the difference between the new franchise matching and the existing internal matching is that it does not require there to already be an opposing interest from a suitable set of clients. “The Franchise Matching algo can be a really interesting new way of internalising as well as being an effective way to fill larger order sizes. It was initially developed for our internal traders, who use it as a risk transfer tool, and so we have already seen that it works very well at sourcing liquidity. In particular, it works best in G4 pairs but it also works well in the rest of G10. Franchise matching is a client opt-in available as part of our flagship dynamic hybrid and pegged algos,” Donner adds.